The Interest Rate That Equates the Present Value of the Cash

question 36

Multiple Choice

The interest rate that equates the present value of the cash flow received from a debt instrument with its market price today is the

• A) simple interest rate.
• B) discount rate.
• C) yield to maturity.
• D) real interest rate.

---

Definitions:

Philadelphia Convention

The gathering in 1787 where the Constitution of the United States was framed and adopted by its original colonies.

Elastic Clause

Also known as the Necessary and Proper Clause, part of the U.S. Constitution allowing Congress to pass laws deemed necessary and proper for executing its enumerated powers.

Supremacy Clause

The Supremacy Clause is a provision in Article VI of the U.S. Constitution establishing that federal law takes precedence over state laws and constitutions when they are in conflict.

Constitution

The fundamental law of a nation or state, outlining the principles and organization of its government. In the U.S. context, it refers to the supreme law of the United States.