Consider a Bond That Costs $1000 Today and Promises a One-Time

question 46

Multiple Choice

Consider a bond that costs $1000 today and promises a one-time future payment of $1080 in four years.What is the approximate interest rate on this bond?

• A)2%
• B)4%
• C)8%
• D)10.8%

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Definitions:

Credit Request

A formal application to a lender or financial institution asking for a loan or credit line.

Indirect Strategy

A method of communication that uses subtlety and nuance, often to avoid confrontation or to convey a message more diplomatically.

Bad-News Messages

Communications designed to convey unfavorable or disappointing information to the recipient.

Informal Research

A method of gathering information in a relaxed manner, without structured techniques common in formal research.