A Bond with No Expiration Date Has a Face Value

question 210

Multiple Choice

A bond with no expiration date has a face value of $10,000 and pays a fixed 10 percent interest.If the market price of the bond rises to $11,000, the annual yield approximately equals

• A)11 percent.
• B)10 percent.
• C)9 percent.
• D)8 percent.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price point, at a specific time.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers at those prices.

Marginal Utility

The additional satisfaction or usefulness obtained from acquiring or consuming one more unit of a product.

Market Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good that all consumers in a market are willing to purchase at each price level.