A Stock Is Selling for $93

question 65

Multiple Choice

A stock is selling for $93.12, and a futures contract on the stock that expires in seven months is selling for $95.27. What is the risk-free rate of interest?

• A) 4.12%
• B) 3.99%
• C) 4.07%
• D) 4.23%
• E) 4.16%

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Definitions:

Foot-In-The-Door Phenomenon

The psychological tactic of getting a person to agree to a large request by first setting them up to agree to a modest request.

Situational Attributions

The process of explaining someone's behavior based on external factors or the context of the situation.

Central Route Persuasion

A method of persuasion that involves deeply processing the content of a message, evaluating the arguments and evidence in support of a particular stance.

Cognitive Dissonance

The state of having inconsistent thoughts, beliefs, or attitudes, especially relating to behavioral decisions and attitude change.