The Market Price of a Bond with 12 Years Until

question 66

Multiple Choice

The market price of a bond with 12 years until maturity and an annual coupon rate of 8% increased yesterday.Which one of these may have caused this price increase?

• A)the bond's rating was downgraded.
• B)the issuing firm announced the next interest payment.
• C)the issuing firm announced that its annual earnings met investor expectations.
• D)market interest rates decreased.

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Definitions:

Equitable

Fair and impartial treatment, especially in matters of distribution of wealth, opportunities, and privileges within a society.

45-degree Line

A line graphed in economics and finance representing places where two variables measured on the axes are equal in value.

Gini Coefficient

A scale assessing the distribution of income among a population, where 0 denotes total equality and 1 indicates complete disparity.

Income

Periodic financial returns from work engagements or investments.