If the Interest Rate Is R and Will Remain R

question 32

Multiple Choice

If the interest rate is r and will remain r forever, then a bond that will pay 95 dollars a year forever, starting one year from now, is worth how much today?

• A)95/(1 + r)dollars.
• B)95(1 + r)dollars.
• C)95/r dollars.
• D)95/(1 + r + r² ........+ rⁿ +........)dollars.
• E)None of the above.

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Definitions:

Republican

Pertaining to a political party in the United States that traditionally supports conservative policies, smaller government, and a free-market economy.

Operational Definition

A specific, measurable definition of a concept that allows for empirical research and testing.

Self-Consciousness

A psychological state where an individual is acutely aware of themselves, their actions, and how they might be perceived by others.

Experimental Hypothesis

A statement predicting the relationship between variables in an experimental design, specifically regarding how an independent variable will affect a dependent variable.