A bond promises to pay $500 in one year and $10,500 in two years. What is the correct way to find the present value of this bond?
a. $500(1 + r) + $10,500/(1 + r)2
b. $500/(1 + r) + $10,500/(1 + r)2
c. $11,000/(1 + r)2
d. $500(1 + r) + $10,500(1 + r)2
b
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Which of the following statements about central bank structure and independence are true?
A) In recent years, with the exception of the Bank of England and the Bank of Japan, most countries have reduced the independence of their central banks, subjecting them to greater democratic control. B) Before the Bank of England was granted greater independence, the Federal Reserve was the most independent of the worlds central banks. C) Both theory and experience suggest that more independent central banks produce better monetary policy. D) While the European Central Bank is independent, it is not as independent as the Federal Reserve.
Trade raises the economic well-being of a nation in the sense that
a. the gains of the winners exceed the losses of the losers. b. everyone in an economy gains from trade. c. since countries can choose what products to trade, they will pick those products that are most beneficial to society. d. the nation joins the international community when it begins to engage in trade.