You Have an Obligation to Pay $1,488 in Four Years

question 79

Multiple Choice

You have an obligation to pay $1,488 in four years and two months.In which bond would you invest your $1,000 to accumulate this amount, with relative certainty, even if the yield on the bond declines to 9.5% immediately after you purchase the bond

• A)A 6-year; 10% coupon par value bond
• B)A 5-year; 10% coupon par value bond
• C)A 5-year; zero-coupon bond
• D)A 4-year; 10% coupon par value bond
• E)None of the options

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Definitions:

Baddeley and Hitch

Psychologists who proposed the model of working memory, describing it as consisting of multiple components including the central executive, phonological loop, and visuospatial sketchpad.

Working Memory

A cognitive system responsible for temporarily holding and manipulating information needed for complex tasks such as learning, reasoning, and comprehension.

Sensory Recorder

A hypothetical or metaphoric device that captures and stores sensory experiences exactly as they are perceived.

Retrograde Amnesia

A form of amnesia where individuals lose memories for events that occurred before a specific event, often a brain injury or trauma.