How Much Would an Investor Lose If She Purchased a 30-Year

question 77

Multiple Choice

How much would an investor lose if she purchased a 30-year zero-coupon bond with a $1,000 par value and 10% yield to maturity, only to see market interest rates increase to 12 percent one year later? (Hint: How much would the price change from a year earlier?)

• A)$19.93
• B)$20.00
• C)$23.93
• D)$25.66 Using the BAII Plus calculator:

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Definitions:

Socialization

The method through which people acquire and assimilate the customs, principles, actions, and interpersonal abilities relevant to their community or social circle.

Resocialization

Resocialization occurs when powerful socializing agents deliberately cause rapid change in one’s values, roles, and self-conception, sometimes against one’s will.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, including ways of thinking, feeling, and behaving.

Socialization

The lifelong process through which people learn the norms, values, behaviors, and social skills appropriate to their society.