The Amount That the Price of Bond "B" Will Change

question 7

Multiple Choice

The amount that the price of bond "B" will change if its yield to maturity increases from 7% to 8% is closest to:

• A)-$36
• B)$9
• C)$36
• D)$39

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Definitions:

Current Ratio

Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations by comparing current assets to current liabilities.

Accounts Receivable

Funds that are to be paid to a business by its customers for the provision of goods or services that have already been delivered or used, but have not been paid for.

Equity Multiplier

A financial ratio that measures the proportion of a company’s assets that are financed by stockholders' equity, indicating the level of debt financing.

New Equity

Funds raised by a company through the issuance of shares to the public or to specific investors.