The Following Information for a Bond Having No Expiration Date

question 123

Multiple Choice

The following information for a bond having no expiration date: bond price = $1,000;bond fixed annual interest payment = $100;bond annual interest rate = 10 percent.
-Refer to the above information.If the price of this bond increases to $1,250,the interest rate in effect will:

• A) fall to 9 percent.
• B) fall to 8 percent.
• C) rise to 11 percent.
• D) rise to 12 percent.

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Definitions:

Mortgagor

The owner of the property that has been mortgaged or pledged as security for a debt.

Secured Credit

A loan or credit extended where the borrower pledges some asset as collateral for the loan, providing the lender a measure of protection against the borrower's default.

Unsecured Credit

Credit that is issued and supported only by the borrower's creditworthiness, without any collateral.

Commercial Context

Refers to situations, activities, or transactions that are related to the commercial or business sector.