Figure 3-3 -Refer to Figure 3-3. the Figure Above Shows the Supply

question 207

Multiple Choice

Figure 3-3
-Refer to Figure 3-3. The figure above shows the supply and demand curves for two markets: the market for original Picasso paintings and the market for designer jeans. Which graph most likely represents which market?

• A) Graph B represents the market for original Picasso paintings and Graph A represents the market for designer jeans.
• B) Graph A represents the market for original Picasso paintings and Graph B represents the market for designer jeans.
• C) Graph A represents both the market for original Picasso paintings and designer jeans.
• D) Graph B represents both the market for original Picasso paintings and designer jeans.

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Definitions:

Annual Coupon

The annual interest payment received by bondholders, expressed as a percentage of the bond's face value.

Par Value

The face value of a bond or stock, as designated by the issuing company, which may not reflect the market value.

Premium

An amount paid for an insurance policy, or the cost above the nominal or face value of a financial instrument.

Par Value

The nominal or face value of a bond, stock, or coupon as stated by the issuer, which is the value written on the face of the security.