With a Nominal Interest Rate of 5% Per Year,the Present

question 49

Multiple Choice

With a nominal interest rate of 5% per year,the present discounted value of $100 to be received in 10 years is

• A)$50.00.
• B)$61.39.
• C)$95.24.
• D)$150.00.
• E) $163.89.

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Definitions:

Other Comprehensive Income

A component of shareholders' equity that includes income and expenses not recognized in net income, such as unrealized gains and losses on investments.

Unrealized Gains

Increases in the value of an asset that have not been sold, hence not yet converting the gain into cash.

Available-For-Sale Securities

Financial assets that are purchased with the intention of selling before their maturity date, not held for long-term investment.

Trading Debt Securities

The act of buying and selling debt instruments, such as bonds, in the financial markets as a means of investment or speculation.