A $40,000 Face Value Bond Matures in 100 Days and Has

question 94

Multiple Choice

A $40,000 face value bond matures in 100 days and has a bank discount yield of 3.86 percent.What is the current value of the bond?

• A) $39,392.19
• B) $39,473.14
• C) $39,486.47
• D) $39,571.11
• E) $39,680.00

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Definitions:

Deadweight Loss

The decrease in economic performance that happens when a good or service fails to meet or cannot attain its optimal distribution point.

Marginal Cost

The cost of producing one additional unit of a good or service, considering all variable resources used in production.

Monopolistic Competition

A type of imperfect competition such that many producers sell products that are differentiated from one another (e.g., by branding or quality) and hence are not perfect substitutes.

Irrational Consumers

Refers to the idea that consumers often make decisions that deviate from the assumptions of rationality in economics, such as making impulsive or emotionally driven purchases.