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

question 46

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 $1000 in two years and $5000 in ten years for certain is closest to:

• A)$3660.
• B)$3687.
• C)$3707.
• D)$4292.

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Definitions:

Ethical Standards

Guidelines or principles designed to govern behavior and decision-making in accordance with moral values and norms.

Truth Telling

The act of conveying information or facts in an honest and transparent manner.

Negotiating Process

The negotiating process entails the series of steps and interactions between parties attempting to reach an agreement or settle a dispute.

Explanations

Statements or reasons given to make something clear or understandable.