What Happens to the Price of a Bond with a $100

question 24

Multiple Choice

What happens to the price of a bond with a $100 face value and an infinite maturity date when interest rates rise from 5 percent to 10 percent and the coupon paid on the bond is $20?

• A)The price falls by $100.
• B)The price rises by $200.
• C)The price rises by $100.
• D)The price falls by $1.
• E)The price falls by $200.

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Definitions:

Social Shopping Behaviors

Consumer activities that combine social media and online shopping, influenced by user reviews, recommendations, and social interactions.

Psychology of Influence

The study of how individuals can affect the thoughts, behavior, and feelings of others, often used in marketing, negotiation, and leadership.

Persuasive Message

A communication designed to influence the attitudes, beliefs, or behaviors of its recipients.

Cognitive Biases

Systematic patterns of deviation from norm or rationality in judgment, where individuals create their own "subjective social reality."