When Bonds Become More Widely Traded,and as a Consequence the Market

question 63

Multiple Choice

When bonds become more widely traded,and as a consequence the market becomes more liquid,the demand curve for bonds shifts to the ________ and the interest rate ________.

• A) right; rises
• B) right; falls
• C) left; falls
• D) left; rises

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Definitions:

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from gross profit.

Variable Costing

A costing method that includes only variable production costs (material, labor, and overhead) in the cost of manufactured goods, treating fixed overhead costs as period expenses.

Unit Product Cost

The total cost to produce one unit of product, including direct materials, labor, and allocated overhead.

Net Operating Income

The profit calculated after all operating expenses are subtracted from total revenue but before interest and taxes are deducted.