You Want to Purchase a Security That Will Pay You

question 66

Multiple Choice

You want to purchase a security that will pay you $1,000 six years from now. If you want to earn an annual nominal rate of 7.5 percent, how much should you pay for this investment today?

• A) $627.41
• B) $630.17
• C) $641.41
• D) $647.96
• E) $662.01

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Definitions:

Vaporization

The phase transition of a substance from a liquid to a gas, occurring through the processes of evaporation or boiling.

Calorie

The amount of heat energy required to raise the temperature of 1 g of water 1°C; equivalent to 4.184 joules. Compare with Kilocalorie.

pH Value

A numeric scale used to specify the acidity or basicity of an aqueous solution, with values ranging from 0 (most acidic) to 14 (most basic), and 7 being neutral.

Beer

A fermented beverage made from barley, hops, water, and yeast, commonly consumed worldwide.