Exhibit 18.2 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 84

Multiple Choice

Exhibit 18.2
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Talmart Corporation bonds have a $1,000 face value and will mature in 4 years. The bonds have a 7% coupon rate. Interest is paid annually and the required rate of return is 6 percent for these bonds.
-Refer to Exhibit 18.2. If interest rates increase 50 basis points, what will be the approximate price change for the Talmart bond?

• A)-17.0%
• B)-1.7%
• C)1.7%
• D)1.8%
• E)17.0%

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Definitions:

Equilibrium Employment

The level of employment where the quantity of labor supplied is equal to the quantity of labor demanded.

Labor-Force Participation

The percentage of the working-age population that is engaged in the labor market, either employed or actively seeking employment.

Minimum Wage

The lowest legally permissible hourly wage that companies can pay to employees.

Bureau of Labor Statistics

A U.S. government agency responsible for collecting and analyzing essential data related to labor economics, including employment, unemployment, and price statistics.