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:

Epidermis

The outermost layer of the skin, serving as a protective barrier against environmental factors.

Peripheral Neuropathy

A condition resulting from damage to the peripheral nervous system, leading to symptoms like numbness, pain, and weakness, primarily in the hands and feet.

Diabetic Client

A term for an individual who is being medically managed or advised for diabetes, a condition characterized by abnormal blood sugar levels.

Foot Wounds

Injuries or breaks in the skin of the foot, which can range from minor abrasions to deep ulcers, often requiring careful management to prevent infection.