Suppose You Pay $9400 for a $10 000 Par Treasury

question 4

Multiple Choice

Suppose you pay $9400 for a $10 000 par Treasury bond maturing in six months. What is the effective annual rate of return for this investment?

• A)6.38%
• B)12.77%
• C)13.17%
• D)14.25%

---

Definitions:

Product Costing

The process of determining the total cost associated with producing a product, including direct labor, materials, and overhead.

Service Organisations

Businesses that offer intangible products or services to consumers, relying on expertise or specialized skills rather than the sale of physical goods.

Plan Overhead Costs

The process of estimating the indirect expenses related to production or operations in advance, such as utilities, rent, and administrative salaries.

Flexible Budgets

Budgets that adjust or flex with changes in volume or activity levels.