An Increase in the Market Rate of Return on an Outstanding

question 62

Multiple Choice

An increase in the market rate of return on an outstanding bond will

• A) increase the coupon rate.
• B) decrease the coupon rate.
• C) increase the bond price.
• D) decrease the bond price.

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Definitions:

Total Revenue

The cumulative revenue a business earns from its sales or service provisions in a given timeframe.

Total Cost

The aggregate cost of all inputs used in the production of goods or services, including fixed and variable costs.

Purely Competitive Seller

A seller in a market where there are many sellers and buyers, the product is standardized, and no single seller can influence the market price.

Shut Down

A temporary closure of a business or operation.