Use the Following Information to Answer the Question(s)below

question 48

Multiple Choice

Use the following information to answer the question(s) below:
Suppose the term structure of risk-free interest rates is given as:
Term 1 year 2 years 3 years 5 years 10 years
Rate 2.25% 2.80% 3.20% 4.10% 6.30%
-The present value of an investment that pays $2000 in one year and $3000 in three years for certain is closest to:

• A)$4707.
• B)$4685.
• C)$4729.
• D)$5000.

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Definitions:

Compression

The act of applying pressure to something, thereby reducing its volume or changing its shape.

Intervertebral Discs

Structures located between the vertebrae that act as shock absorbers and allow for flexibility in the spine.

Costal Cartilages

Bars of hyaline cartilage that connect the ribs to the sternum, contributing to the elasticity and expansion capability of the rib cage.

Adult Skeleton

The fully developed, mature skeleton of an adult human, comprising 206 bones that provide structure, protection, and leverage for movement.