On the Internet You Find the Following Offers for Opening

question 100

Multiple Choice

On the Internet you find the following offers for opening an online account.Which of them is the best offer if you have $2,000 to save for two years?

• A)an interest rate of 5 percent,with the bank charging you a $15 processing fee at the time you open your account
• B)an interest rate of 3.5 percent,with the bank giving you a $35 bonus to open your account
• C)an interest rate of 4 percent,with the bank giving you a $20 bonus at the time you open your account
• D)an interest rate of 4.5 percent,with no processing fee and no bonus

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Definitions:

Net Present Value

Net Present Value (NPV) represents the disparity between cash inflows' present value and cash outflows' present value throughout a specified timeframe.

Rights Offering

A corporate initiative where existing shareholders are given the right to purchase additional shares at a discount before the shares are offered to the public.

Market Price

The current price at which a security or commodity is bought or sold in the market.