The Required Rate of Return on a Certain Bond Changes

question 18

Multiple Choice

The required rate of return on a certain bond changes from 12 percent to 8 percent, causing the price of the bond to change from $900 to $1,100. The bond price elasticity of this bond is ​

• A)- 0.36.
• B)- 0.44.
• C)- 0.55.
• D)- 0.67.
• E)0.67.

Recognize the concepts of Type I and Type II errors in hypothesis testing.

Grasp the principles of covered interest arbitrage and how it affects currency values.

Learn the methodologies for calculating net present value (NPV) in international finance, including home and foreign currency approaches.

Comprehend the impact of international trade agreements on exchange rates and trade flows.