You have a bond that pays $18 per year in coupon payments. Which of the following would result in a decrease in the price of your bond?
A) Coupon payments on newly-issued bonds fall to $15 per year.
B) The likelihood that the firm issuing your bond will default on debt decreases.
C) The price of a share of stock in the company rises.
D) Coupon payments on newly-issued bonds rise to $22 per year.
Answer: D
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In an economy, 43 million people are employed, 3 million are unemployed, and 4 million are not in the labor force. What is the employment-to-population ratio?
A) 86 percent B) 92 percent C) 93 percent D) 6.5 percent
When the quantity effect outweighs the price effect:
A. a price increase will cause a decrease in total revenue. B. a price increase will cause an increase in total revenue. C. a price decrease will cause a decrease in total revenue. D. None of these is true.
Which of the following is considered a problem with active policy?
a. Estimating the potential output b. Forecasting aggregate demand c. Tools must already be in place to achieve results relatively quickly. d. All of the above are problems with the implementation of active policy
John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the table below:Hours PerDay CleaningWindowsTotal Numberof WindowsCleaned0017211314416517Should John spend a third hour cleaning windows?
A. Yes, because the additional amount he would earn is $6, which is better than earning nothing. B. No, because the additional amount he would earn is $6, which is less than his opportunity cost of $7. C. Yes, because he would earn $28. D. Yes, because the additional amount he would earn is $14, which is greater than his opportunity cost of $7.