What Is the Current Value of a $5,000 Face Value

question 56

Multiple Choice

What is the current value of a $5,000 face value STRIPS with 6 years to maturity and a yield to maturity of 8.1%?

• A)$2,998.09
• B)$3,009.16
• C)$3,105.02
• D)$3,128.10
• E)$3,133.40

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Definitions:

Spotlight Effect

This refers to the tendency to overestimate how much other people notice about us, especially our appearance and behavior.

Fundamental Attribution

The tendency to overestimate the influence of personality traits and underestimate the influence of situational factors when evaluating someone else's behavior.

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time, leading to psychological tension and behavior change.

Elaboration Likelihood

A theory in social psychology that suggests there are two routes to attitude change: the central route, which involves careful thought, and the peripheral route, which relies on superficial cues.