Use the Table for the Question(s)below

question 55

Multiple Choice

Use the table for the question(s) below.
Consider the following four bonds that pay annual coupons:
-The percentage change in the price of the bond "C" if its yield to maturity increases from 9% to 10% is closest to:

• A)-17%
• B)-6%
• C)-4%
• D)4%

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Definitions:

Cyclical Unemployment

Refers to the unemployment that occurs due to fluctuations in the economy or the business cycle, such as during a recession.

Budget Deficit

A budget deficit occurs when a government’s expenditures exceed its revenues within a given fiscal period, leading to the need for borrowing or using saved reserves.

Keynesian Model

An economic theory advocating for government intervention in the economy through fiscal policies to manage demand and address unemployment.

Creeping Inflation

A relatively low rate of inflation, such as the rate of less than 4 percent in the United States in recent years.