The Percentage Increase in a Price Index from One Year

question 25

Multiple Choice

The percentage increase in a price index from one year to the next is the

• A) real GDP growth rate.
• B) inflation rate.
• C) GDP inflator.
• D) None of the answers is correct.

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Definitions:

Maturity

The predetermined date on which a financial instrument, loan, or security reaches its final payment, at which point the principal amount must be repaid.

Zero-Coupon Bond

A debt security that doesn't pay periodic interest, sold at a discount from its face value, and repays the face value at maturity.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, considering both the interest payments and the capital gain or loss.

Market Price

The price at which an asset or service is traded in the open market.