You Are Considering Buying a Discount Bond That Costs $1,000

question 47

Multiple Choice

You are considering buying a discount bond that costs $1,000 today and pays you $1,200 in one year.However, there is a 10 percent chance that the company issuing the bond will go bankrupt and not pay you your interest or return your principal.What is the expected return on the bond?

• A)20 percent.
• B)10 percent.
• C)8 percent.
• D)−4 percent.

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Definitions:

Biopsychosocial Model

A model of health that integrates the biological, psychological, and social factors all playing a role in human functioning.

Competency

The ability of an individual to do a job properly, encompassing both the skill and knowledge required.

Legal Term

A phrase or word used within the legal profession, recognized and defined in legal contexts.

Mental Illness

A wide range of mental health conditions that affect mood, thinking, and behavior.