Suppose You Bought an Inflation-Indexed Security for $12,000 in January

question 13

Multiple Choice

Suppose you bought an inflation-indexed security for $12,000 in January 2013 which pays an annual interest of 4 percent.If the value of the inflation index in January 2013 was 106 and its value in January 2014 was 105, what is the value of the inflation-adjusted principal?

• A)$12,114.29
• B)​$11,342.58
• C)​$8,000.60
• D)​$13,126.41

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Definitions:

Similarity

The extent to which two things are alike or share common characteristics.

Contact

The act or state of physical touching or being in close proximity, or the initiation of communication between individuals.

Jigsaw Classroom

An educational approach designed to minimize racial conflict and increase positive educational outcomes by having students from different backgrounds work together to complete a task.

Superordinate Goal

A shared goal that can only be achieved through cooperation among individuals or groups often used to resolve conflicts.