A decline in the price of a bond causes the yield of the bond to

A) rise.
B) fall.
C) remain unchanged.
D) rise if it's a short-term bond, fall if it's a long-term bond.

A

Economics

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Mr. Jones, an elderly man living on his retirement, pulls $100,000 from certificates of deposit (CDs), which were returning an annual rate of return of 5%

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Wendy has to decide between taking a flight and driving to California. Air tickets cost $800 and will get her to California in 2 hours. If she decides to drive, she would need $300 worth of gasoline and 10 hours to reach her destination

Suppose that Wendy's opportunity cost of time is $20 per hour. Assuming that there are no other costs involved, use cost-benefit analysis to decide whether she should fly or drive to California. If Wendy has an important business meeting to attend and this increases her opportunity cost of time to $200 per hour, will her optimum decision change? Explain.

Economics