Question
Suppose the term structure of interest rates is shown below: Term 1 year 2 years 3 years 5 years 10 years 20 years Rate (EAR%)
Suppose the term structure of interest rates is shown below:
| Term | 1 year | 2 years | 3 years | 5 years | 10 years | 20 years |
| Rate (EAR%) | 5.00% | 4.80% | 4.60% | 4.50% | 4.25% | 4.15% |
The present value (PV) of receiving $1,100 per year with certainty at the end of the next three years is closest to ________.
| A. | $3,010 | |
| B. | $4,214 | |
| C. | $3,612 | |
| D. | $2,408 |
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Corporate Finance Governance And Business Cycles Theory And International Comparisons
Authors: Robert E. Krainer
1st Edition
0444510494, 9780444510495
