Time Value Concepts May Be Used to Determine

question 29

Multiple Choice

Time value concepts may be used to determine
1. the annual growth rate in dividends
2. the amount in an IRA account after ten years
3. the tax owed on a capital gain

• A)1 and 2
• B)1 and 3
• C)2 and 3
• D)only 2

Identify the components of interest rates, including risk premiums, and how they influence observed interest rates.

Describe the factors that influence the term structure of interest rates and the formation of yield curves.

Understand the economic implications of various yield curve shapes (normal, inverted, flat).

Discriminate between different types of risk premiums (default, maturity, liquidity) and their impact on interest rates.

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