The Yield on a Perpetuity Bond That Has an Interest

question 173

Multiple Choice

The yield on a perpetuity bond that has an interest payment of $60 and a price of $1,200 is

• A) 5%.
• B) 6%.
• C) 12%.
• D) 25%.

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Definitions:

Market Failure

The failure of a market to be efficient; when the individual pursuit of self-interest leads to bad results for society as a whole.

Market Power

The ability of a producer to raise prices.

Externalities

External benefits and external costs.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning individuals cannot be effectively excluded from use, and where use by one individual does not reduce availability to others.