You Have an Investment That Will Mature in 20 Months

question 108

Multiple Choice

You have an investment that will mature in 20 months with the value of $2500. You need some quick cash and decide to sell it today at a discount rate of 10% compounded quarterly. What is the cash value?

• A) $659.23
• B) $2009.63
• C) $2120.54
• D) $2299.63
• E) $2219.63

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Definitions:

Stock Dividend

A form of dividend payment made by a company to its shareholders in the form of additional shares rather than cash.

Market Price

The current market value at which a service or good can be traded.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on a part of the company's profits or losses.

Par Common Stock

The face or nominal value attributed to a common stock share as specified in the company's charter.