Use the Table for the Question(s)below

question 76

Multiple Choice

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

-The net present value (NPV) of an investment that costs $2 700 and pays $1 000 at the end of one, three, and five years is closest to:

• A)$1 665.62
• B)-$100.26
• C)$21.47
• D)-$71.38

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Definitions:

Default

The failure to fulfill an obligation, especially to repay a loan or appear in a court of law.

Open-Economy Macroeconomic

A branch of economics that studies how economies interact with other countries' economies in terms of trade, investment, and finance.

Net Exports

The value of a country's total exports minus its total imports, representing the net trade balance of goods and services.

Interest Rates

The share of a loan levied as interest on the borrower, typically indicated as an annual percentage of the unpaid loan amount.