The Going Rate of Interest on a 5-Year Treasury Bond

question 134

Multiple Choice

The going rate of interest on a 5-year treasury bond is 4.25%.You have one that will pay $2,500 five years from now.How much is the bond worth today?

• A) $1,928.78
• B) $2,030.30
• C) $2,131.81
• D) $2,238.40
• E) $2,350.32

---

Definitions:

Net Cash Flow

The difference between a company's cash inflows and outflows within a defined period.

Operating Activities

Part of cash flow that represents the revenues and expenses directly related to the core business operations.

Financial Statements

A set of formal records that outline the financial activities and position of a business, individual, or other entity, typically comprising the balance sheet, income statement, and cash flow statement.

Statement Of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.