Exhibit 18.3 Use the Information Below for the Following Problem(S)

question 37

Multiple Choice

Exhibit 18.3
Use the Information Below for the Following Problem(S)
A $1000 par value bond with 4 years to maturity and a 5% coupon has a yield to maturity of 6%. Interest is paid annually.
-Refer to Exhibit 18.3.Estimate the percentage price change for this 4-year $1,000 par value bond,with annual 5% coupon,if the yield falls from 6% to 5.5%.

• A) -3.50%
• B) -1.75%
• C) 1.75%
• D) 3.50%
• E) None of the above

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Definitions:

Distribution Transformer

A transformer used in electrical power distribution to step down voltage levels from high to lower levels for consumer use.

Control Transformer

A transformer used to provide a stable voltage supply to control devices in electrical circuits, isolating them from the main power circuit.

Inrush Current

The amount of current that is drawn when an inductive device is first connected to the power line.

Magnetizing

Refers to the process of inducing magnetic properties in a material, usually by placing it within a magnetic field or by passing an electric current through it.