If a $10,000 face-value discount bond maturing in one year is selling for $5,000, then its yield to maturity is
A) 5 percent.
B) 10 percent.
C) 50 percent.
D) 100 percent.
D
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Assume that in the market for plasma TVs there is an increase in supply. The result will be:
A) an increase in equilibrium price and quantity. B) a decrease in equilibrium price and quantity. C) an increase in equilibrium quantity and uncertain effect on equilibrium price. D) a decrease in equilibrium price and increase in equilibrium quantity.
Refer to the above figure. At a price of $2 per gallon, there is
A) a surplus of 20,000 gallons per month. B) a shortage of 40,000 gallons per month. C) a shortage of 80,000 gallons per month. D) a shortage of 60,000 gallons per month.
Lenders generally want a higher interest rate to compensate them when loans stretch over a longer period because:
A. lenders want to be compensated for being unable to get their money back quickly. B. the opportunity cost increases over time. C. there's more uncertainty about potential future investment opportunities. D. All of these are true.
Four possibilities are equally likely and have payoffs of $2, $4, $6, and $8 . The expected value is:
a. $5 b. $6 c. $7 d. $8