If the Annual Interest Rate Printed on the Face of a Bond

question 110

Multiple Choice

If the annual interest rate printed on the face of a bond is 16 percent,the face value of the bond is $1,000,and the current market price of the bond is $200,what is the current yield on the bond?

• A)5.5 percent.
• B)200.0 percent.
• C)16.0 percent.
• D)80.0 percent.

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Definitions:

Deep Depression

An extended period of significant decline in the economy, characterized by high unemployment, sharp decreases in output and trade, and widespread poverty.

Capacity Utilization Rate

A measure of how well an economy or a firm is using its productive capacity to manufacture goods or services.

Unemployment Rate

A gauge of the share of individuals in the labor pool who are not employed but are actively seeking a job.

Economy Operated

Refers to the manner in which a nation’s economic systems and policies are managed and function to produce goods and services.