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12. A credit market instrument that pays the owner the face value of the security at the maturity date and nothing prior to then is called a

a.  simple loan.

b.  fixedpayment loan.

c.  coupon bond.

d.  discount bond.

13. A ______ pays the owner a fixed coupon payment every year until the maturity date, when the ______ value is repaid.

a.  coupon bond; discount

b.  discount bond; discount

c.  coupon bond; face

d.  discount bond; face

14. If a $10,000 facevalue discount bond maturing in one year is selling for $8,000, then its yield to maturity is

a.  10 percent.

b.  20 percent.

c.  25 percent.

d.  40 percent.

15. Which of the following are true of coupon bonds?

a.  The owner of a coupon bond receives a fixed interest payment every year until the maturity date, when the face or par value is repaid.

b.  U.S. Treasury bonds and notes are examples of coupon bonds.

c.  Corporate bonds are examples of coupon bonds.

d.  All of the above.

e.  Only (a) and (b) of the above.

16. Which of the following are true for discount bonds?

a.  A discount bond is bought at a price below its face value.

b.  The purchaser receives the face value of the bond at the maturity date.

c.  U.S. Treasury bonds and notes are examples of discount bonds.

d.  All of the Above.

e.  Only (a) and (b) of the above.

17. The concept of _____ is based on the common-sense notion that a dollar paid to you in the future is less valuable to you than a dollar today.

a. present value

b.  future value

c.  interest

d.  deflation

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