Use the Table for the Question(s)below

question 30

Multiple Choice

Use the table for the question(s) below.
Suppose the term structure of interest rates is shown below:
-The present value of receiving $1000 per year with certainty at the end of the next three years is closest to:

• A)$2737.
• B)$2723.
• C)$2733.
• D)$2744.

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Definitions:

Consecutive Years

A period of time consisting of sequential years immediately following one another without interruption.

Predicting

The action or process of making forecasts about future events or outcomes based on current or historical data.

Weak Form

The hypothesis that past stock prices and trading volume do not affect future stock prices, suggesting that technical analysis cannot predict future movements.

Efficient-Market Hypothesis

The theory that all available information is already reflected in stock prices, suggesting that it is impossible to consistently achieve higher returns than the overall market through expert stock selection or market timing.