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133

What is the quoted discount rate on a money market instrument?

A.The interest rate earned as a percentage of the final face value of a bond

B.The interest rate earned as a percentage of the initial price of a bond

C.The interest rate earned as a percentage of the average price of a bond

D.The risk-free rate used to calculate the present value of future cash flows from a bond

A.The interest rate earned as a percentage of the final face value of a bond

B.The interest rate earned as a percentage of the initial price of a bond

C.The interest rate earned as a percentage of the average price of a bond

D.The risk-free rate used to calculate the present value of future cash flows from a bond

Answer: A

The quoted discount rate is the interest earned as a percentage of the final face value

The quoted discount rate is the interest earned as a percentage of the final face value

Flashcard info:

Author: CoboCards-User

Main topic: Finance & Investment

Topic: Derivatives

Published: 27.10.2015