A Bond Premium Can Be Considered to Be

question 153

Multiple Choice

A bond premium can be considered to be

• A)a reduction in borrowing cost.
• B)unrelated to the borrowing cost.
• C)an asset.
• D)an increase in the borrowing cost.

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Definitions:

Inverse Supply

A representation of the relationship where the price of a good influences the quantity supplied, typically showing higher quantities supplied at higher prices.

Tax

Compulsory contributions to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions.

Demand Function

A mathematical equation that describes the relationship between the quantity of a good consumers are willing to buy and the good’s price, holding other factors constant.

Supply Function

A mathematical expression that shows the relationship between the quantity of a good supplied by producers and the price of the good.