Use the Figure for the Question(s)below

question 65

Multiple Choice

Use the figure for the question(s) below.
-The current zero-coupon yield curve for risk-free bonds is shown above.What is the price per $100 face value of a four-year,zero-coupon,risk-free bond?

• A)$85.64
• B)$87.99
• C)$92.15
• D)$96.67
• E)$90.85

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Definitions:

The General Theory of Employment, Interest, and Money

A seminal work by John Maynard Keynes that laid the foundation for Keynesian economics and the study of macroeconomics.

Long-Run Aggregate Supply

Long-Run Aggregate Supply (LRAS) represents an economy's total production capacity when all factors of production are fully utilized, assuming constant technology and resource availability.

Real GDP

The measure of a country's economic output adjusted for price changes, such as inflation or deflation, giving a more accurate reflection of the economy's size and how it's growing over time.

Business Cycles

Fluctuations in economic activity characterized by periods of expansion (growth) and contraction (recession) in an economy.