If You Paid $6,000 for a Two-Year Maturity Bond with a Face

question 21

Multiple Choice

If you paid $6,000 for a two-year maturity bond with a face value of $8,640 and a zero percent coupon rate, what would be your rate of return?

• A)25%
• B)20%
• C)15%
• D)12%
• E)8%

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Definitions:

American Net Exports

The value of exports from the United States minus the value of its imports, expressing the country's trade balance with rest of the world.

Federal Reserve

The central banking system of the United States, responsible for implementing monetary policy, supervising banks, and ensuring financial stability.

Money Supply

The sum of all money present in an economy at a given moment, which encompasses cash, coins, and the amounts in checking and savings accounts.

Currency

A system of money in general use in a particular country or in the international market for trade and finance.