lessee pays the lease payments.
B. the lessee must pay both the lease payment and the loan payment.
C. the loan is considered paid in full if the lessee discontinues making the lease
payments or terminates the lease early.
D. the lessor is only obligated to make loan payments as long as the lessor is collecting
the lease payments.
E. the lessor must pursue the lessee if the lessee fails to make the agreed upon lease
Andy deposited $3,000 this morning into an account that pays 5 percent interest,
compounded annually. Barb also deposited $3,000 this morning into an account that
pays 5 percent interest, compounded annually. Andy will withdraw his interest earnings
and spend it as soon as possible. Barb will reinvest her interest earnings into her
account. Given this, which one of the following statements is true?
A. Barb will earn more interest the first year than Andy will.
B. Andy will earn more interest in year three than Barb will.
C. Barb will earn interest on interest.
D. After five years, Andy and Barb will both have earned the same amount of interest.
E. Andy will earn compound interest.
Farmer Ted planted 200 acres in wheat this year. The weather has been perfect and he
expects to harvest a record crop within the next two weeks. At present, he has no
storage facilities and therefore must sell his crop as soon as it is harvested. Which one
of the following risks is he facing because he must sell his crop at whatever the market
price is at harvest time?
A. futures risk
B. volatility exposure
C. surplus risk
D. transactions exposure
E. translation exposure