Consider a Government of Canada Bond with a Face Value

question 60

Multiple Choice

Consider a Government of Canada bond with a face value of $1000,and a present value of $925.If this bond is offered for sale at $960,then

• A)the excess demand for the bond at $960 will drive the price up to the face value of the bond.
• B)individuals will purchase the bond at the offer price which will drive the market rate of interest up.
• C)individuals will purchase the bond at the offer price which will drive the market rate of interest down.
• D)the equilibrium market price of this bond has been achieved.
• E)the lack of demand for this bond will drive the price down until it reaches its equilibrium market price of $925.

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Definitions:

Bounded Ethicality

The concept that cognitive biases and organizational contexts limit individuals’ ability to make ethically ideal decisions.

Ethical Blind Spots

The tendency to overlook or underestimate the ethical dimensions of one’s actions or decisions, often due to cognitive biases.

Ethical

Pertaining to or dealing with morals or the principles of morality; adhering to accepted standards of conduct.

Managers

Individuals in an organization responsible for directing and overseeing the work of a group of people towards the achievement of goals and objectives.