Use the Following Information to Answer the Question(s)below

question 48

Multiple Choice

Use the following information to answer the question(s) below:
Suppose the term structure of risk-free interest rates is given as:
Term 1 year 2 years 3 years 5 years 10 years
Rate 2.25% 2.80% 3.20% 4.10% 6.30%
-The present value of an investment that pays $2000 in one year and $3000 in three years for certain is closest to:

• A)$4707.
• B)$4685.
• C)$4729.
• D)$5000.

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Definitions:

Posthypnotic Suggestion

A directive given to a person under hypnosis that they are to carry out after awakening from the hypnotic state.

Mailed Postcards

Physical cards, often decorative or photo-based, sent through postal services to convey messages across distances.

Perception

The cognitive process of interpreting and organizing sensory information to understand the environment.

Hypnotized

The state of having one's attention, awareness, and consciousness altered by hypnosis, making the individual more open to suggestion.