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A U . S . Treasury bond will pay a lump sum of $ 1 , 0 0 0 exactly 3 years from today. The
A US Treasury bond will pay a lump sum of $ exactly years from today. The nominal interest rate is semiannual compounding. Which of the following statements is CORRECT?
a The PV of the $ lump sum has a higher present value than the PV of a year, $ ordinary annuity.
b The periodic interest rate is greater than
c The present value of the $ would be smaller if interest were compounded monthly rather than semiannually.
d The present value would be greater if the lump sum were discounted back for more periods.
e The periodic rate is less than
The most upvoted answer is C but I don't see how that is possible, as compounding interest more frequently increases the value of the bond as interest is compounded on top of itself
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