You Are to Receive a Cash-Flow of $40 After Three

question 20

Multiple Choice

You are to receive a cash-flow of $40 after three years. If the ytm of this cash-flow is 6%, what is its present value? (Assume a semi-annual basis for compounding and discounting.)

• A) $28.20
• B) $33.50
• C) $33.58
• D) $37.74

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Definitions:

Chi-Squared Test

A statistical test used to determine the significance of the observed differences between categorical datasets and expected outcomes.

Nominal Data

Data that is categorized without a natural order or ranking, used for labeling variables without a quantitative value.

Population

The complete collection of objects or people that can be used to draw samples for statistical study.

Multinomial Experiment

A statistical experiment that can result in multiple outcomes, where each outcome has a fixed probability of occurring.