A Month Ago, You Bought a One-Year Bond with a Value

question 60

Multiple Choice

A month ago, you bought a one-year bond with a value of $100 that pays a fixed interest rate of 5 percent per year. The interest rate of the economy was also 5 percent. Today you read in the newspaper that the interest rate in the economy decreased to 3 percent. You are holding a bond that is:

• A)more desirable to other investors.
• B)less desirable to other investors.
• C)not desirable at all.
• D)desirable to you.

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Definitions:

Depressants

A category of drugs that reduce the functioning of the nervous system, often prescribed to relieve anxiety, induce sleep, or manage seizures.

Cocaine

A powerful stimulant drug derived from the leaves of the coca plant, known for its addictive properties and illegal status in many countries.

Tranquilizers

Medications used to reduce tension or anxiety; also known as anxiolytics.

Barbiturates

A class of drugs that act as central nervous system depressants, often used as sedatives or sleeping aids.