As the Price of an Existing Bond Increases

question 39

Multiple Choice

As the price of an existing bond increases,

• A)The current yield decreases.
• B)The par value decreases.
• C)The coupon rate decreases.
• D)There is increased risk that the U.S.Treasury will default on the bond.

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Definitions:

Labor Productivity

The measure of economic performance calculated by dividing the output by the number of labor hours used to produce it.

Technological Advance

The process of developing and applying new techniques and tools to improve efficiency, productivity, or quality in various fields.

Input Proportions

The ratio of one type of input to another type of input used in the production of goods or services.