Assume That the Interest Rate on a Federally Insured Deposit

question 14

Multiple Choice

Assume that the interest rate on a federally insured deposit declines from 15 percent per annum to 10 percent.If an individual holding a U.S.Treasury bill worth $2,500 plans to sell it after this drop in interest rate, he would realize (approximately) a:

• A)capital gain worth $99.
• B)capital loss worth $100.
• C)capital gain worth $100.
• D)capital loss worth $99.

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