Suppose That All Investors Expect That Interest Rates for the 4

question 22

Multiple Choice

Suppose that all investors expect that interest rates for the 4 years will be as follows: $\begin{array}{lc}\text { Year } & \text { Forward Interest Rate } \\0 & \text { (today) } 3\% \\1 & 4\% \\2 & 5\% \\3 & 6\%\end{array}$
What is the yield to maturity of a 3-year zero-coupon bond?

• A) 7.00%
• B) 9.00%
• C) 6.99%
• D) 4.00%
• E) None of the options are correct.

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Total Revenue

The total income received by a firm from the sale of its goods or services.

Marginal Revenue

Marginal revenue is the additional income generated from selling one more unit of a good or service.

Marginal Revenue

The rise in income achieved by selling an extra unit of a product.

Total Revenue

The overall amount of money generated by a company or entity from its activities, such as sales of goods or services, before any costs or expenses are deducted.