Use the Figure for the Question(s)below

question 118

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 risk-free interest rate on a 3-year maturity?

• A)3.00%
• B)3.15%
• C)3.25%
• D)6.34%
• E)3.50%

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Definitions:

Cash

A form of liquid asset that includes currency, coins, and balances in bank accounts, used by businesses to carry out transactions.

Common Stock

Equity ownership in a corporation, with holders usually having voting rights and receiving dividends variable with the company’s profitability.