If Average Total Cost Is $0

question 21

Multiple Choice

If average total cost is $0.75 when output is 100 units and total fixed cost is $10,average variable cost is

• A) $0.65.
• B) $9.25.
• C) $10.75.
• D) $65.
• E) $75.

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Definitions:

Coupon Bond

A coupon bond is a debt security that pays the holder periodic interest payments based on a fixed interest rate until the bond matures, at which point the face value is paid to the bondholder.

Substitution Swap

Exchange of one bond for another more attractively priced bond with similar attributes.

Duration

An indicator that represents how the price of a bond or any similar type of debt is affected by interest rate fluctuations, displayed as a duration in years.

Mispricing

Situations where the market price of an asset deviates from its theoretical or intrinsic value.