If a Bond Offers $2,000 in Interest Payments at the End

question 39

Multiple Choice

If a bond offers $2,000 in interest payments at the end of each of next 5 years and a repayment of $10,000 also at the end of the 5 years and the current discount rate is 3 percent, what is the market price for the bond?

• A)$12,874
• B)$7,593
• C)$18,256
• D)$17,786

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Definitions:

Partial Reinforcement

A conditioning schedule where responses are only occasionally reinforced, making the learned behavior more resistant to extinction.

Punishment

A concept in behavior psychology that involves the introduction of an unpleasant stimulus or the removal of a pleasant one following an undesired behavior, with the intention of decreasing that behavior.

Designated Driver

A person appointed to abstain from alcohol and drive others safely who have been drinking.

Avoidance Learning

Learning to avoid events or conditions associated with aversive consequences or phobias.