Suppose a company's bond sold for $100 last month and this month the price is $90. The annual interest payment is $18. The current yield on this bond is
A. 20 percent.
B. 10 percent.
C. 18 percent.
D. 1.8 percent.
Answer: A
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For a mortgage lender that makes mortgage loans to borrowers, which one of the following would be an example of adverse selection?
a. After the loan has been made, individuals become careless with their finances b. Individuals most likely to default are the ones most likely to apply for the loan c. Borrowers investing their loan proceeds differently than the bank requires d. None of the above
Suppose that a price discriminating monopolist is able to divide its market into two groups. If the firm sells its product for $25 to the group whose customers have the least elastic demand, what price are they likely to charge to the group whose customers have the most elastic demand?
A. $25 B. more than $25 C. less than $25 D. The answer depends on the marginal revenue for that group.
When price is sufficient to cover average variable costs, firms suffering short-run losses will continue to operate rather than shut down.
Answer the following statement true (T) or false (F)
In the ordered pair (20, 30), 20 is the
a. the x-coordinate. b. the horizontal location of the point. c. the y-coordinate. d. Both a and b are correct.