One year before maturity the price of a bond with a principal amount of $1,000 and a coupon rate of 5% paid annually fell to $981. The one year interest rate must be
A. 8.5%.
B. 7.0%.
C. 5.0%.
D. 1.9%.
Answer: B
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If Mousey Mike does not tattle, what would Bratty Brad's best response be
a. Hit b. Not hit c. Run d. Hide
Suppose Mike agrees to borrow $100 from Renee for one year at a one-time interest payment of 5%. They both expected the inflation rate to be 2% during the one-year period. However, during that year the inflation rate was actually 1%. Which of the following has occurred?
a. The unexpectedly low inflation rate has redistributed $1 from Mike to Renee b. The unexpectedly low inflation rate has redistributed $5 from Mike to Renee c. The unexpectedly high inflation rate has redistributed $1 from Mike to Renee d. There have not been any redistribution costs to either party e. The unexpectedly low inflation rate has redistributed $1 from Renee to Mike
Macroeconomics deals with
A. the what, who, and how questions faced by any economy B. the role of prices and markets in allocating outputs C. the determinants of aggregate output, overall levels of prices and inflation, growth, etc. D. all of the above
The marginal physical product of labor for the most recent worker hired by a company is 100. If this company were to hire an additional worker we would expect the marginal physical product of labor to
A. be above 100 by a small amount. B. be below 100. C. remain at 100. D. be infinity.