You Want to Purchase a Security That Will Pay You

question 45

Multiple Choice

You want to purchase a security that will pay you $1,000 five years from now. If you want to earn an annual nominal rate of 5.5%, how much should you pay for this investment today?

• A)$727.41
• B)$737.46
• C)$741.41
• D)$743.51
• E)$765.13

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Definitions:

Net Transfers

The net amount of money transferred into or out of an entity, often considered in the context of international trade or government budgets.

Importer

An individual or firm that brings goods or services into a country from abroad for sale.

Pairs Of Pants

A measure or quantity that refers specifically to trousers, counted in units of two legs each.

Current Account

A component of a country's balance of payments that measures the trade of goods and services, net income, and direct transfers with the rest of the world.