A 7% CD Was Issued at Par, Which You Now

question 597

Multiple Choice

A 7% CD was issued at par, which you now purchase at 6.75%. You would expect to pay:

• A) The face value of the CD
• B) More than the face value
• C) Less than the face value
• D) Too little information to decide

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Definitions:

Short Run

In economics, a period in which at least one input is fixed and cannot be changed by the firm.

Firm's Output

The total quantity of goods or services produced by a company within a specific period.

Short Run

Refers to a time period in which at least one input (e.g., capital) is fixed, limiting the ability of a business to adjust to changes in market demand or production costs.

Firm's Output

The total quantity of goods or services produced by a company.