When the Price of a Bond Is Above the Equilibrium

question 98

Multiple Choice

When the price of a bond is above the equilibrium price,there is excess ________ in the bond market and the price will ________.

• A) demand; rise
• B) demand; fall
• C) supply; fall
• D) supply; rise

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Definitions:

Coefficient Of Determination

A measure, usually represented as R^2, that shows the proportion of the variance in the dependent variable that is predictable from the independent variable(s).

Variance

A measurement of the spread between numbers in a data set, signaling how far each number in the set is from the mean.

MSE

Mean Squared Error, a measure of the average squared differences between the estimated values and the actual value, indicating the quality of an estimator.

SSE

Sum of Squares due to Error, a measure used in statistical analysis to quantify the discrepancy between the observed and predicted data values.