Because of a Change in the Required Rate of Return

question 8

Multiple Choice

Because of a change in the required rate of return from 11 percent to 13 percent, the bond price of a zero-coupon bond will fall from $1,000 to $860. Thus, the bond price elasticity for this bond is

• A)0.77.
• B)-0.77.
• C)-0.90.
• D)-1.06.
• E)none of the above.

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Definitions:

Hemoglobin

Iron-containing respiratory pigment occurring in vertebrate red blood cells and in the blood plasma of some invertebrates.

Oxygen-rich Blood

Blood that has been oxygenated in the lungs and is being transported by the arteries to the rest of the body.

Mammary Glands

Specialized organs in mammals responsible for producing milk to nourish their young.

Constant Body Temperature

Pertains to the maintenance of a stable internal body temperature regardless of external conditions, characteristic of endotherms.