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You Are the Leader of a Student Organization Working to Pass

question 79

Essay

You are the leader of a student organization working to pass federal legislation that would increase financial aid to college students.What specific strategies could you employ to overcome the free-rider problem in order to build your organization and increase your political clout?


Definitions:

Annual Coupon Bonds

Bonds that pay interest to the bondholder yearly until maturity, at which point the face value is also repaid.

Yield To Maturity

The expected total yield from a bond when held until its maturity date.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to interest rate changes, representing the weighted average time until all cash flows are received.

Yield-To-Maturity

The expected total yield on a bond when held to its maturity date, stated as a yearly percentage.

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