You Have Purchased a U

question 72

Multiple Choice

You have purchased a U.S.Treasury bond for $3,000.No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $5,000.What interest rate will you earn on this bond?

• A) 3.82%
• B) 4.25%
• C) 4.72%
• D) 5.24%
• E) 5.77%

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Definitions:

Social Value

The importance or worth of something in terms of its contribution to society or the community.

Private Value

The value of a good or service to an individual rather than to society as a whole or to the market.

Externality

A cost or benefit arising from an activity or transaction that affects an unrelated third party who did not choose to incur that cost or benefit.

Command-And-Control Policies

Governmental regulations that directly mandate specific practices or limit activities in order to achieve policy outcomes, such as environmental standards.