Household borrowings are expected to fall, if interest rates

When economy is doing well, the perception of risk

diminishes

Which of the following efficiencies related to financial markets is achieved when the costs of conducting transactions are as low as possible? 

Explain the interest rate risk faced by financial institutions.

What is the future value of Rs. 50,000 invested in a stock after one year if the expected return on the stock is 5%?

Do not put any symbol in your answer

Which of the following bonds has a low yield?

ABC limited is planning to invest Rs. 30,000 in an AI software. They are

expected to receive revenue of Rs. 18,000 for the next two years. As the total

of expected revenue (Rs. 36,000) is more than the investment (Rs. 30,000), ABC

limited should invest in the software.

Maruti Suzuki is planning to open a chip manufacturing factory for which

an investment of Rs. 10 billion is required. It is expected to generate Rs. 3

billion each for the next four years. Should Maruti take this opportunity and

set up the factory? Assume the interest rate to be 10%.

A bond with a face value of 1,00,000 and a coupon rate of 12% is going

to mature after five years. The yield on a similar five-year bond is 8%. Calculate

the present value of the bond, assuming that the interest rate is annually compounded.

Do not put any symbol in your response. 

XYZ Bank provides a loan to Sally. For the bank, the loan is considered a: