Use the Table for the Question(s) Below

question 7

Multiple Choice

Use the table for the question(s) below.
Suppose the term structure of interest rates is shown below:

-Consider an investment that pays $1000 certain at the end of each of the next four years.If the investment costs $3,500 and has an NPV of $74.26,then the four year risk-free interest rate is closest to:

• A) 4.5%
• B) 4.58%
• C) 4.55%
• D) 4.53%

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