If an Investor Purchases a 3%, 5-Year Bond at Its

question 84

Multiple Choice

If an investor purchases a 3%, 5-year bond at its par value of $1,000 and the CPI increases 3% over each of the next 5 years, what will be the real value of the principal at maturity?

• A)$1,000.00
• B)$1,030.00
• C)$1,060.90
• D)$1,061.36

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Definitions:

Temporary Activation

A short-term increase in the activity or responsiveness of a particular neural pathway or system.

Consistent Tendency

A pattern of behavior or thought that is regularly observed in an individual or process over time, indicating a predictable way of responding.

Behavioral Tendency

A predisposition to act or react in a certain manner, often learned from past experiences or shaped by psychological factors.

Self-actualization

The achievement or actualization of one's abilities and capacities, seen as an inherent motivation or necessity in all individuals.