A Bond with No Expiration Has an Original Price of $10,000

question 314

Multiple Choice

A bond with no expiration has an original price of $10,000 and a fixed annual interest payment of $1,000.If the price of this bond increases by $2,500, the interest rate in effect will

• A)decrease by 1 percentage point.
• B)decrease by 2 percentage points.
• C)increase by 1 percentage point.
• D)increase by 2 percentage points.

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Definitions:

Discouraged Workers

Individuals who are not actively seeking employment due to a belief that no jobs are available for them.

CPI

The Consumer Price Index is a metric that calculates the average cost of a selection of consumer items and services, including food, transportation, and healthcare, by looking at their weighted average prices.

Inventory Cycles

Fluctuations in inventory levels within industries or businesses, affected by changes in demand, supply chain dynamics, and production planning.

Manufacturing Role

The sector of an economy dedicated to the production of goods through the processing of raw materials.