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To Be Binding, a Price Floor Must Be Set Above

question 231

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To be binding, a price floor must be set above the equilibrium price.


Definitions:

Yield To Maturity

The total return anticipated on a bond if it is held until the end of its lifetime.

Face Value

The nominal value printed on a financial instrument such as a bond or stock certificate; it is the amount paid at maturity or when the instrument is issued.

Current Price

The latest market price at which an asset or service is traded.

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