Question

51. Differences in borrowing rates can generally be explained by the level of risk of the investment or loan and by the length of the investment or loan.

A) TRUE

B) FALSE

Answer:

53. Zero-coupon bonds are priced at deep discounts.

A) TRUE

B) FALSE

Answer:

Answer 1

ANSWER 51 ........THE statement is TRUE difference in borrowing rate generally be explaned by the level of risk of the investmernt or loan and by the lenght of the investment or loan as when there is more risk in the investment interest rate is high and when the risk in investment in low then rate is low for example when we invest in goverenment securities thr returns are law as the risk there low rate is also been influenced by the time period of loan or investment .For example when we any thing on EMI basis the if we take EMI of longer month then we have to pay the interest more on that .. ANSWER 53........THE statement is true zero coupon bonds are priced at deep discount because in zero coupon bonds we will not get any interest but they are issued at discount and when they are mature they mature at their face value and we will get the gain of difference between the discounted issue price and maturity price that is face vale