A Bond Issued by a Corporation on October 1, 2007

question 25

Multiple Choice

A bond issued by a corporation on October 1, 2007, is scheduled to mature on October 1, 3007. If today is October 2, 2009, what is this bond's time to maturity? (Assume annual interest payments.)

• A) 2 years
• B) 50 years
• C) 998 years
• D) 100 years

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Definitions:

Long-Run Aggregate-Supply

The total output of an economy when all resources are fully employed, with prices of inputs and outputs able to adjust to any changes.

Real GDP

The inflation-adjusted value of all goods and services produced within a country's borders in a year, reflecting the actual productivity of an economy.

Price Level

An index reflecting the overall current prices for a wide range of goods and services within the economy, averaged out.

Exchange-Rate Effect

Refers to the impact of changes in the exchange rate on a country's export and import prices, and subsequently on its trade balance.