You Hold a $1,000 Bond That Has an Interest Rate

question 207

Multiple Choice

You hold a $1,000 bond that has an interest rate of 5 percent.If comparable interest rates rise to 10 percent, and you decide to sell this bond, the price you receive will be

• A)$1,000.
• B)$500.
• C)$2,000.
• D)You will not be able to sell the bond since it only pays 5 percent.

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Definitions:

Internationalization

The process by which businesses expand their operations beyond national borders, seeking to reach global markets and tap into foreign resources.

Financial Measures

Quantitative indicators used to assess the financial stability, performance, or position of a business or economy.

Federal Reserve

is the central banking system of the United States, responsible for managing the nation's monetary policy and overseeing its banking institutions.

Automatic Stabilizers

Programs such as unemployment insurance benefits and taxes that are already on the books to help alleviate recessions and hold down the rate of inflation.