Suppose You Have a Chance to Buy a Treasury Strip

question 71

Multiple Choice

Suppose you have a chance to buy a Treasury strip.The strip is from a government bond with a 6% coupon rate (face value of $1,000) .You will receive this strip in one year and have a discount rate of 10%.What is the price you are willing to pay for this strip?

• A) $36.87
• B) $54.55
• C) $60.00
• D) $94.34

---

Definitions:

European Trade

The exchange of goods, services, and capital between countries within Europe, as well as between Europe and other parts of the world, which has historically played a significant role in the global economy.

English Settlement

The establishment of communities and colonies by English explorers and settlers in various parts of the world, particularly in North America, during the late 16th to early 18th centuries.

North America

A continent located in the Northern Hemisphere and almost entirely within the Western Hemisphere, comprising countries such as Canada, the United States, and Mexico.

Indian Cultures

The diverse and rich traditions, beliefs, practices, and social structures of the numerous native peoples of the Indian subcontinent or of Indigenous peoples in the Americas.