Suppose You Have a Chance to Buy a Treasury Strip

question 31

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

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Definitions:

Right-to-Work Laws

Statutes that provide workers with the choice to join or support a labor union without facing mandatory membership as a condition of employment.

Voluntarism

A philosophy or principle that promotes voluntary actions or services rather than those compelled by law.

Communism

A political and economic ideology advocating for the common ownership of the means of production and the absence of social classes, money, and the state.

Socialism

A political and economic ideology advocating for collective or governmental ownership and administration of the means of production and distribution of goods.