Bonds are always worth more than par value at maturity

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Reference no: EM131875715

Determine if these statements are true or false.

1. True or False: We can find the nominal interest rate by dividing the default and maturity premiums from the sum of the real rate and inflation.

2. True or False: In the period 1950 – 1999 changes in the inflation premium was the main factor causing nominal interest rates to change.

3. True or False: Interest rates were high in the late 1970s and early 1980s because of unusually high default premiums.

4. True or False: A $1,000 par value bond with an annual coupon rate of 10% would pay $100 in interest every 6 months.

5. True or False: Premium bonds are always worth more than par value at maturity.

Reference no: EM131875715

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