Suppose interest is compounded half-yearly at the rate of 10% per annum. If the present value of an asset, which returns a fixed sum of ₹ after one year and nothing thereafter, is ₹ 50,000, then is equal to
Tap an option to check your answer.
1 mark, −0.25MacroeconomicsTime value of money and bond pricingPresent value, discounting and compoundingEasyabout 1 min
JNU SSS 2013 Question 51: Time value of money and bond pricing
Answer and worked solution
Checking your account…
Plain-text version
Suppose interest is compounded half-yearly at the rate of 10% per annum. If the present value of an asset, which returns a fixed sum of ₹ X after one year and nothing thereafter, is ₹ 50,000, then X is equal to (A) ₹ 54,750 (B) ₹ 55,000 (C) ₹ 55,125 (D) ₹ 55,250
Time value of money and bond pricing has come up 20 times in 5 exams since 2010.
What this question tests
This question is on Present value, discounting and compounding, part of Time value of money and bond pricing in Macroeconomics.
Comparing money at different dates.
TestStop has 12 past-paper questions on this subtopic.
Similar questions from other papers
- The present value of a perpetual cash flow of Rs.250 per year, discounted at the rate of 10% each year, is Rs..
- Suppose Amar borrows Rs. 1000 from Ujala. After one year, Ujala wants Rs. 1100 back from Amar. The yield to maturity in percent (%) on this borrowing is (round off to…
- If the current rate of interest changes from 5% to 4%, the market value of a pre-existing bond changes by:
- Which one is NOT TRUE about bonds?
- Assume you have the option to choose between receiving a given amount of money M 5 years from now or 10 years from now, and the discount rate is positive. Which option…
Question from the JNU SSS 2013 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.