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

question 136

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A bond with no expiration has an original price of $10,000 and a fixed annual interest payment of $1000.If the price of this bond decreases by $2000, the interest rate in effect will:


Definitions:

Profit Rate

The ratio of profits earned to the amount of capital invested over a given period, indicating the efficiency of using capital in production.

Loan Syndicates

Groups of lenders or financial institutions that come together to provide large loans to a single borrower, spreading the risk among them.

Inventory Investment

The change in the stock of unsold goods and materials held by a business over a period of time, affecting the overall investment levels in the economy.

Level of Inventory

The quantity of goods that a company has in stock at a specific time.

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