Suppose a Supplier Has an Agreement with a Firm to Be

question 100

Multiple Choice

Suppose a supplier has an agreement with a firm to be paid $50,000 in 4 years. If the annual interest rate is 1 percent, the supplier would be indifferent between receiving _______now and waiting 4 years to receive the $50,000.

• A)$48,076.92
• B)$49,550.22
• C)$48,049.02
• D)49,557.89

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Definitions:

Maple Bond

A Maple Bond is a debt security, denominated in Canadian dollars, issued by foreign companies or governments that are sold in Canada.

Canadian Bond Market

The marketplace where Canadian government and corporate bonds are issued and traded, reflecting Canada's economic condition and interest rates.

Canadian Market

The financial and economic market within Canada, encompassing various sectors, including the Toronto Stock Exchange (TSX).

U.S. Bond Market

The financial market in which U.S. government and corporate bonds are traded, essential for investors looking for debt securities.