Calculate the current yield on a bond that has an annual interest payment of $200 and a resale price of $1,550. What is the relationship between bond prices and yield?
What will be an ideal response?
The current yield on a bond that has an annual interest payment of $200 and a resale price of $1,550 is $200/$1,550 = 0.129, or 12.9 percent. There is an inverse relationship between bond prices and yields.
You might also like to view...
Suppose aggregate demand is increasing over time. Would the modern Keynesian model assume that the price level would always be constant? Explain
What will be an ideal response?
Economists consider price discrimination to always be undesirable.
Answer the following statement true (T) or false (F)
If ________, a firm would operate in the short run and exit the industry in the long run.
A. TR > TVC but TR < TC B. TR < TC and TR < TVC C. TR > TVC and TR > TC D. TR = TVC but TR > TC
If an increase in the price of Good A causes a decrease in demand for Good B, Goods A and B are said to be complements
a. True b. False Indicate whether the statement is true or false