What would you pay for a newly issued 10-year bond with face value of $10,000 and no coupon payments? Assume the interest rate is 5 percent (0.05) per year
a. $0
b. $6,139.13
c. $10,000
d. $95,632.41
e. $100,000.00
B
You might also like to view...
If the inverse demand curve a monopoly faces is p = 100 - 2Q, MC is constant at 16, and the government imposes an $8 per unit specific tax on the monopoly, the deadweight loss due to both the monopoly and the tax is
A) $529. B) $1332. C) $1764. D) $441.
If wages are sticky, then a smaller than expected increase in the price level
a) reduces the real costs of production, so the aggregate quantity of goods and services rises. b) raises the real costs of production, so the short-run aggregate supply curve shifts left. c) reduces the real costs of production, so the short-run aggregate supply curve shifts right. d) raises the real costs of production, so the aggregate quantity of goods and services declines.
US 30yr fixed mortgage rates are averaging less than 4% annual interest rates (for those with good credit)
a. true b. false
From an initial long-run macroeconomic equilibrium, if the Federal Reserve anticipated that next year aggregate demand would grow significantly slower than long-run aggregate supply, then the Federal Reserve would most likely
A) decrease interest rates. B) increase interest rates. C) decrease income tax rates. D) increase income tax rates.