Refer to the given information. If the price of this bond falls by $200, the interest rate will:
Answer the question on the basis of the following information for a bond having no expiration
date: bond price = $1,000; bond fixed annual interest payment = $100; bond annual interest
rate = 10 percent.
A. rise by 2.5 percentage points.
B. rise by 5 percentage points.
C. fall by 2.5 percentage points.
D. fall by 5 percentage points.
A. rise by 2.5 percentage points.
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The Laffer curve
A) initially slopes upward as increasing tax rates lead to increasing tax revenue but eventually will slope downward as increasing tax rates lead to decreasing tax revenue. B) slopes upward throughout its range since increasing tax rates will always lead to increases in tax revenue. C) is horizontal because tax revenue is independent of the rate of interest. D) slopes downward throughout its range since increasing tax rates will always lead to decreases in tax revenue.
A(n) ________ shows the bundles of two goods that provide an equal level of satisfaction to the consumer
A) budget set B) indifference curve C) demand curve D) budget line