The Next Question Is Based on the Following Information

question 57

Multiple Choice

The next question is based on the following information:

-GDP is ________ billion.

• A) $2,710
• B) $2,960
• C) $3,310
• D) $3,610
• E) $5,610

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Definitions:

Treasury Bond

A long-term, interest-bearing security issued by the U.S. government.

STRIPPED Cash Flows

Cash flows that are separated from their financial instruments in order to be sold as individual securities.

Arbitrage

The simultaneous purchase and sale of an asset in different markets to exploit price differences for a risk-free profit.

Treasury STRIPS

Separate Trading of Registered Interest and Principal of Securities; bonds that are dissected into individual principal and interest payments and sold separately.