If You Sell This Bond Now,the Internal Rate of Return

question 108

Multiple Choice

If you sell this bond now,the internal rate of return you will earn on your investment will be closest to:

• A)5.0%
• B)5.6%
• C)6.0%
• D)8.0%

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Definitions:

Perfectly Inelastic

Describes a situation in which the quantity demanded of a good does not change regardless of changes in its price.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is unachievable.

Tax

A required financial fee or another kind of duty enforced on a taxpayer by government authorities, designed to raise funds for government outlays and a range of public expenses.

Price-Elastic Supply

A situation where the quantity supplied of a good changes significantly as a result of changes in its price.