Consider a Bond with a $100,000 Face Value That Matures

question 44

Multiple Choice

Consider a bond with a $100,000 face value that matures in 1 year.If the bond pays a nominal interest rate of 8%,what is the bond's discount?

• A) $8,000.
• B) $7,407.
• C) $4,000.
• D) $1,250.

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Definitions:

Spearman Rank Correlation Coefficient

A rank correlation metric that does not rely on parametric assumptions to evaluate how effectively a monotonic function describes the connection between two variables.

Ordinal Variables

A type of variable where the order of the values is significant, but the differences between the values are not necessarily consistent.

Interval Variables

Interval variables are a type of quantitative variable that have ordered values with consistent differences but no true zero point, such as temperature in Celsius.

T-Table Values

Values in a table that represent critical values of the t-distribution used in hypothesis testing, dependent on the desired significance level and degrees of freedom.