A Local Bank Is Offering a Zero Coupon Certificate of Deposit

question 56

Multiple Choice

A local bank is offering a zero coupon certificate of deposit for $25,000. At maturity, three yearsfrom now, the investor will receive $32,000. What is the rate of return on this investment?

• A) 6 percent
• B) 9 percent
• C) 12 percent
• D) 3 percent

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Definitions:

Histogram

A graphical representation of the distribution of numerical data, where the data is divided into intervals or "bins," and the frequency of data within each bin is depicted.

Bar Chart

A graphical representation of data using bars of different heights or lengths to compare values across categories.

Distribution Of Quantitative Data

The way in which quantitative data are spread or dispersed across different values.

Bar Charts

A graphical display of data using bars of different heights or lengths to represent various values.