Which One of the Following Must Be Equal for Two

question 30

Multiple Choice

Which one of the following must be equal for two bonds if they are to have similar changes in their prices given a relatively small change in bond yields?

• A)coupon payment
• B)time to maturity
• C)market price
• D)duration
• E)current yield

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Definitions:

Marginal Revenue

The additional income gained from selling one more unit of a good or service.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service, a crucial concept for decision making in production and pricing strategies.

Economic Profit

The difference between total revenue and total cost, including both explicit and implicit costs, representing the additional benefit over the next best alternative.

Competitive Price-searcher Market

A market structure where firms have some control over the pricing of their products due to differentiation, but still face significant competition.