A 1% Decline in Yield Will Have the Least Effect

question 69

Multiple Choice

A 1% decline in yield will have the least effect on the price of the bond with a _________.

• A) 10-year maturity, selling at 80
• B) 10-year maturity, selling at 100
• C) 20-year maturity, selling at 80
• D) 20-year maturity, selling at 100

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Definitions:

Own Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, ceteris paribus.

Cell Phones

Portable electronic devices that enable users to make voice calls, send text messages, and access various forms of digital media and internet services.

Pay Phone Industry

The business sector involved in providing public telephones that operate with the insertion of coins or by credit card payments.

Unitary Elastic

In economics, it describes a situation where a change in the price of a good or service results in a proportional change in the quantity demanded or supplied.