For a Given Change in Interest Rates, a Bond's Price

question 57

Multiple Choice

For a given change in interest rates, a bond's price change is _____ related to the bond's coupon rate.

• A) directly
• B) not
• C) inversely
• D) Directly if the bond is selling at a premium, inversely if the bond is selling at a discount.
• E) Directly if the bond is selling at a discount, inversely if the bond is selling at a premium.

Identify factors influencing the elasticity of demand, including the categorization of goods as necessities or luxuries.

Analyze the implications of elasticity on firm’s revenue and pricing strategy.

Understand the concept of income elasticity of demand.

Differentiate between inelastic and elastic demand.

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Definitions:

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