Assume That the Interest Rate on a Federally Insured Deposit

Multiple Choice

Assume that the interest rate on a federally insured deposit declines from 15 percent per annum to 10 percent.If an individual holding a U.S.Treasury bill worth $2,500 plans to sell it after this drop in interest rate, he would realize (approximately) a:

A) capital gain worth $99.
B) capital loss worth $100.
C) capital gain worth $100.
D) capital loss worth $99.