$100 Is Received at the Beginning of Year 1, $200

question 51

Multiple Choice

$100 is received at the beginning of year 1, $200 is received at the beginning of year 2, and $300 is received at the beginning of year 3.If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is ________.

• A)$1,536.
• B)$672.
• C)$727.
• D)$1,245.

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Definitions:

Annual Coupon Rate

The annual interest rate paid by a bond issuer to its holder, expressed as a percentage of the bond's face value.

Market Price

The immediate cost at which one can buy or sell a service or asset in the marketplace.

Semiannually

Occurring twice a year, commonly used in the context of interest payment schedules or bond coupon payments.

Yield To Maturity

The expected total yield on a bond if it is retained until its maturity date.