Suppose the Term Structure of Interest Rates Is Shown Below

question 90

Multiple Choice

Suppose the term structure of interest rates is shown below:

The present value (PV) of receiving $1100 per year with certainty at the end of the next three years is closest to ________.

• A) $3010
• B) $2408
• C) $3612
• D) $4214

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Definitions:

Stress

A state of mental or emotional strain or tension resulting from adverse or demanding circumstances.

Sex

Biological and physiological characteristics that define humans as male or female.

Alarm Reaction

The initial response of the body's stress system, activating the fight or flight response to perceive threats.

General Adaptation Syndrome

A three-stage response (alarm, resistance, exhaustion) that the body has to long-term exposure to stress, proposed by Hans Selye.