Suppose you are deciding whether or not to buy a particular bond for $5,980.17 . If you buy the bond and hold it for 5 years, then at that time you will receive a payment of $10,000 . You will buy the bond today if the interest rate is
a. no less than 9.48 percent.
b. no greater than 9.48 percent.
c. no less than 10.83 percent.
d. no greater than 10.83 percent.
d
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Sarah is considering lending an amount of $45,000 to her friend who promises to return $60,000 after the end of ten years
What is the net present value of Sarah's investment? Is it worthwhile to undertake this investment? Assume that the market rate of interest is 6%.
The circular flow model assumes:
A. businesses and households own the factors of production. B. businesses own the factors of production. C. government owns the factors of production. D. households own the factors of production.
The general form for discounting is
A) PV = FVt (1 + i)t. B) PV = FVt /(1 + i)t. C) PV = (1 + i)t/FVt. D) PV = 1/(1 + it)t.
In the United States, the distribution of wealth is more unequal than the distribution of income.
Answer the following statement true (T) or false (F)