Consider a Bond That Pays $1000 in One Year

question 4

Multiple Choice

Consider a bond that pays $1000 in one year.Suppose that the market interest rate for savings is 8%,but the interest rate for borrowing is 10%.The price range that this bond must trade in a normal market if no arbitrage opportunities exist is closest to:

• A)$909 to $917.
• B)$909 to $926.
• C)$917 to $926.
• D)$909 to $1000.

---

Definitions:

Nausea

A sensation of discomfort and unease in the stomach, often preceding vomiting.

Alcohol

a colorless, volatile, flammable liquid that is the principal type of alcohol found in alcoholic beverages.

Stimulant

A substance that raises levels of physiological or nervous activity in the body.

Cannabis Use Disorder

A condition characterized by a problematic pattern of cannabis use leading to clinically significant impairment or distress, including a strong desire to use cannabis, difficulty controlling its use, and experiencing withdrawal symptoms.