What Is the Quoted Discount Rate on a Money Market

question 8

Multiple Choice

What is the quoted discount rate on a money market instrument?

• A) The interest rate earned as a percentage of the final face value of a bond
• B) The interest rate earned as a percentage of the initial price of a bond
• C) The interest rate earned as a percentage of the average price of a bond
• D) The risk-free rate used to calculate the present value of future cash flows from a bond

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Definitions:

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