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:

Histamine

A nitrogenous compound involved in local immune responses, regulating physiological function in the gut, and acting as a neurotransmitter for the brain, spinal cord, and uterus.

Protease

An enzyme that breaks down proteins into smaller peptides or amino acids.

Sublingual Nitroglycerine

A medication administered under the tongue to quickly relieve chest pain associated with angina by dilating blood vessels.

Vasodilator

A type of medication or substance that causes blood vessels to expand, increasing blood flow.