Because of a Change in the Required Rate of Return

question 39

Multiple Choice

Because of a change in the required rate of return from 11 percent to 13 percent, the bond price of a zero-coupon bond will fall from $1,000 to $860. Thus, the bond price elasticity for this bond is

• A)0.77.
• B)- 0.77.
• C)- 0.90.
• D)- 1.06.
• E)None of these are correct.

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Definitions:

Attrition

The loss of participants from a study over time, which can impact the validity of research outcomes.

Study

The act of examining and investigating a subject in detail in order to discover new information.

Research Methods

The techniques and procedures used to conduct scientific studies to gather and analyze data.

Surveys

A research method for collecting data from a predefined group of respondents to gain information and insights on various topics of interest through questions.