A Demand Curve of the Form: Q = a -

question 87

Multiple Choice

A demand curve of the form: Q = a - bP, where a and b are positive real numbers,:

• A) is an upward sloping straight line.
• B) has a constant price elasticity of demand.
• C) is a downward sloping straight line.
• D) is a parabolic curve.

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Definitions:

Coupon

A voucher entitling the holder to a discount for a particular product or service.

Zero-Coupon Bond

A bond that is issued at a discount and repaid at face value at maturity, without periodic interest payments.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates, typically expressed in years.

Coupon

The interest rate on a bond that the issuer promises to pay to the holder until maturity.