Use the Table for the Question(s)below

question 69

Multiple Choice

Use the table for the question(s) below.
Suppose the term structure of interest rates is shown below:

-The present value (PV) of receiving $1 000 per year with certainty at the end of the next three years is closest to:

• A)$2 723
• B)$2 744
• C)$2 737
• D)$2 733

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Definitions:

Obligation Settlement

The process of fulfilling or discharging a liability, such as paying off a loan, fulfilling a contract, or making a required payment.

Contingent Liabilities

Responsibilities that may arise based on the outcome of a future event.

Financial Statements

Documents that provide an overview of the financial condition of an entity including its assets, liabilities, revenues, and expenses over a particular period.