If the Final Expressions in a Present Value Equation Used

question 191

Multiple Choice

If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$50 / (1 + .08) ³] + [$500 / (1 + .08) ³]," which of the following is correct?

• A)The face value is $500,the coupon is $50,and the coupon will mature in 3 years.
• B)The face value is $50,the interest rate you need is 8 percent,and the coupon will mature in 3 years.
• C)The face value is $500,the interest rate you need is 3 percent,and the coupon will mature in 8 years.
• D)The coupon is $50,the interest rate you need is 1.08 percent,and the coupon will mature in 3 years.

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Definitions:

Ecological Systems Theory

A theory focusing on the organization and interactions of the multiple environmental contexts within which children develop.

Microsystem

The immediate environments in which an individual interacts directly, such as family, school, and peer group, part of Bronfenbrenner's ecological systems theory.

Mesosystem

A concept in ecological systems theory referring to the interconnections between the microsystems or immediate environments in a person's life.

Social Policy

Guidelines and interventions designed to address public issues and promote social welfare.