Martha B's Has Total Assets of $1,750

question 9

Multiple Choice

Martha B's has total assets of $1,750. These assets are expected to increase in value to either $1,800 or $2,400 by next year. The company has a pure discount bond outstanding with a face
Value of $2,000.This bond matures in one year. Currently, Treasury bills are yielding 6 percent. What
Is the value of the equity in this firm?

• A) $16.98
• B) $34.59
• C) $36.67
• D) $37.08
• E) $51.89

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Definitions:

U.S. Net Capital Outflow

The difference between the amount of U.S. assets bought by foreigners and the amount of foreign assets bought by Americans within a specific time period.

Chinese Currency

Refers to the official currency of China, primarily the Renminbi (RMB), with the yuan as the basic unit.

Trade Deficit

A situation where a country's imports of goods and services exceed its exports, leading to more money leaving the country than coming in from foreign nations.

Net Outflow

The difference between the outflow of funds for foreign investments by citizens and the inflow of foreign funds for domestic investments.