Because of a Change in the Required Rate of Return

question 43

Multiple Choice

Because of a change in the required rate of return from 11 percent to 13 percent, the bond price of a zero-coupon bond will fall from $1,000 to $860. Thus, the bond price elasticity for thisbondis

• A) 0.77.
• B) -0.77.
• C) -0.90.
• D) -1.06.
• E) none of the above.

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Definitions:

Organic Product

A compound or material derived from living organisms or synthesized to mimic natural substances, often used in chemistry and industry.

Major Structure

Refers to the most stable or predominant structure among several possible structures of a molecule under given conditions.

Oxidation State

A number that represents the total number of electrons that an atom either loses or gains in order to form a chemical bond with another atom.

Carbon

A chemical element with symbol C, fundamental to life and one of the most widely distributed elements in the universe, known for its ability to form various stable covalent bonds with other atoms.