The Equal Rate of Price Change from Each Subsequent Up

question 43

Multiple Choice

The equal rate of price change from each subsequent up state and fixed rate price change from each subsequent down state are reasonable if:

• A) there is a constant variability.
• B) any new information impacting prices is similar period to period.
• C) interest or discount rates are constant.
• D) Both there is a constant variability and interest or discount rates are constant.
• E) Both there is a constant variability and any new information impacting prices is similar period to period.

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Definitions:

Market Price

The present rate at which a service or asset is available for purchase or sale on the market.

Bond Discount

The difference between the face value of a bond and its selling price, when the bond is sold for less than its face value.