All Else Equal,when Interest Rates ________,The Duration of a Coupon

question 64

Multiple Choice

All else equal,when interest rates ________,the duration of a coupon bond ________.

• A)rise;falls
• B)rise;increases
• C)falls;falls
• D)falls;does not change

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Definitions:

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or commodity, often to protect consumers.

Price Floor

A government or regulatory-imposed minimum price set for a particular good or service, below which it cannot be sold, often to protect producers or encourage production.

Surplus

The situation in which the quantity of a good or service supplied exceeds the quantity demanded at the existing price.

Price Ceiling

A price ceiling is a legal maximum price set by the government for certain goods or services to prevent prices from becoming prohibitively high.