Rommel Buys a Bond in the Amount of $2,000 with a Promised

question 35

Multiple Choice

Rommel buys a bond in the amount of $2,000 with a promised interest rate of 17 percent.If the market interest rate increases to 27 percent,Rommel can sell her bond for up to

• A)$1,259.26.
• B)$540.00.
• C)$7,407.00.

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Definitions:

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning weights to each number.

Short-term Creditor

A creditor that provides loans or credit to a business or individual with an expectation of repayment within a short period, typically less than a year.

Liquidity

The ability of an asset to be quickly converted into cash without losing its value.