Suppose a Treasury bond will mature in 3 years. If the bond pays a coupon of $100 per year and will make a final par value payment of $3,000 at maturity, what is its price if the relevant market interest rate is 7%?
A) $2,448.89
B) $2,711.33
C) $3,247.57
D) $3,510.00
B
You might also like to view...
The term contagion refers to
A) a government's complete control over it's banking system. B) a drop in interest rates across industrialized countries. C) the vulnerability of healthy economies to crises generated by events elsewhere. D) a directed attack on one market by a foreign market. E) a side effect of international trade.
Assume that the actual inflation rate is 3 percent, the target inflation rate is 2.5 percent, and that the percentage difference between actual and potential real GDP is 1 percent
According to the Taylor rule, the federal funds rate target should be A) 3.25 percent. B) 5.75 percent. C) 6.25 percent. D) 5.50 percent.
All of the payment to a factor of production will be economic rent when the factor of production has:
A) an infinitely inelastic supply curve. B) an infinitely elastic supply curve. C) a constant, unit elastic supply curve. D) an infinitely inelastic demand curve.
If a society is operating on its production possibilities frontier, and then decides to produce less health care,
a. its standard of living will fall b. its standard of living will improve c. some of its resources will become unemployed d. it will be able to produce more of some other good or service e. the opportunity cost of producing health care will rise