A USTreasury Bond Will Pay a Lump Sum of $1,000 Exactly

question 136

Multiple Choice

A U.S.Treasury bond will pay a lump sum of $1,000 exactly 3 years from today.The nominal interest rate is 6%,semiannual compounding.Which of the following statements is CORRECT?

• A) The periodic interest rate is greater than 3%.
• B) The periodic rate is less than 3%.
• C) The present value would be greater if the lump sum were discounted back for more periods.
• D) The present value of the $1,000 would be larger if interest were compounded monthly rather than semiannually.
• E) The PV of the $1,000 lump sum has a smaller present value than the PV of a 3-year,$333.33 ordinary annuity.

---

Definitions:

Metasearch Tool

A software tool that sends user requests to several search engines or databases and aggregates the results into a single list.

Individual Search Engines

Online tools or platforms that allow users to search for information on the internet based on individual queries.

Combined Results Page

A web page that aggregates and displays multiple related search results, often from different sources or databases, in one consolidated view.

Simple Random Sampling

A statistical method where each member of a population has an equal chance of being selected in the sample.