The Numbers Provided Are in Millions of Dollars and Reflect

question 51

Multiple Choice

The numbers provided are in millions of dollars and reflect market values: The short-term debt consists of 4-year bonds paying an annual coupon of 4 percent and selling at par. What is the duration of the short-term debt?

• A)3.28 years.
• B)3.53 years.
• C)3.78 years.
• D)4.03 years.
• E)4.28 years.

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Definitions:

Nearsightedness

A common vision condition where close objects appear clearly, but distant ones are blurry, also known as myopia.

Retina

The light-sensitive layer at the back of the eye that contains cells which convert light into electrical signals for the brain to interpret.

Gate Theory

A theory suggesting that the spinal cord contains a neurological "gate" that either blocks pain signals or allows them to continue on to the brain.

Signal-Detection Theory

A framework describing how individuals discern between information-bearing patterns and random patterns that distract from the information, especially in the context of decision-making under uncertainty.