If Comparable Bonds Are Paying 7 Percent and the Approximate

question 21

Multiple Choice

If comparable bonds are paying 7 percent and the approximate market value of a $1,000 bond is $1,286,then what is the semiannual interest on the bond?

• A)$45
• B)$90
• C)$100
• D)$70
• E)$35

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Definitions:

Producer Surplus

The difference between the amount producers are willing to supply a good for and the amount they actually receive.

Consumer Surplus

The difference between the total amount that consumers are willing to pay for a good or service and the total amount they actually pay.

Marginal Benefit

This is the additional benefit received from the consumption of one more unit of a good or service.

Output Level

Refers to the quantity of goods or services produced by a firm or economy at a given point in time.