All Else Constant,a Bond Will Sell at ________ When the Yield

question 30

Multiple Choice

All else constant,a bond will sell at ________ when the yield to maturity is ________ the coupon rate.

• A)par; less than
• B)a premium; equal to
• C)par; higher than
• D)a discount; higher than
• E)a premium; higher than

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Definitions:

Government Savings Bond

A low-risk investment product issued by a government, offering a fixed rate of interest over a specified period.

Scarcity

The essential economic issue revolves around the apparent infinite desires and necessities of humans in a world where resources are finite.

Absolute Advantage

The ability of an individual or country to produce more of a certain good compared to another individual or country using the same amount of resources.

Specialization

The process of focusing efforts and resources on a limited range of activities, goods, or services to gain efficiency, expertise, or productivity.