Question

All are true/false

11) The truth in Lending Act requires banks to report the APR as opposed to the EAR.

12)The monthly deposits needed to accumulate $10,000 at 12% after 5 years <$150

13) The average yield on AAA-rated corporate bonds> the average yield on T-bonds.

14) Inflation is not a component of the nominal yield on T-bills.

15) The monthly payment on a 6-year loan of $15,000 at 12% > $300.

Answer 1

15) False: the monthly payment on a 6 year loan of 15,000 $ @ 12% interest is less than 300 $ , i.e it is 293.25$ approximately

14)False: Inflation is one of the component which affects the nominal yiels on Treasury bills.

13) True: The average yield on AAA-rated corporate bonds (2.40% now) is greater than the average yield on T-bonds.

12) False: the monthly deposits needed to accumulate 10,000$ @ 12% after 5 years is greater than 150$ i.e around 222 $ approximately

11) True:  Banks has to report the APR as opposed to the EAR.

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