A Local Bank Is Offering a Zero-Coupon Certificate of Deposit

question 15

Multiple Choice

A local bank is offering a zero-coupon certificate of deposit for $25,000. At maturity, three years from now, the investor will receive $32,000. What is the rate of return on this investment?

• A) 3 percent
• B) 6 percent
• C) 9 percent
• D) 12 percent

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Definitions:

Transduction

The process by which sensory receptors convert external stimuli into neural signals that can be interpreted by the brain.

Spectrum

A range or continuum within which objects, values, or phenomena possess a particular characteristic to varying degrees.

Lemon

A yellow, acidic fruit of the citrus family, known for its sour taste and high vitamin C content, often used in cooking and beverages.

Yellow Wavelengths

The segment of the light spectrum that is perceived by the human eye as yellow, typically around 570–590 nm.