Calculate the holding period return for a $1,000 face value bond with a $60 annual coupon purchased for $970.00 and sold three years later for $1,060.00.
What will be an ideal response?
9.02%. Here we have to consider the present value of the three coupon payments as well as the present value of the capital gain that results from purchasing the bond for $970 and selling it for $1,060.
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An appreciation of a nation's currency is
A) a situation in which exchange rates are allowed to fluctuate in the open market in response to changes in supply and demand. B) the increase in the exchange value of one nation's currency in terms of an other nation. C) a nation in which households, firms, and governments buy and sell national currencies. D) the decrease in the exchange value of one nation's currency in terms of another nation.
When one observes consumption and investment patterns over time, one finds that:
A. like consumption, investment is fairly stable over time. B. like consumption, investment is fairly erratic over time. C. unlike consumption, which is fairly stable over time, investment is subject to erratic fluctuations. D. unlike consumption, which is subject to erratic fluctuations, investment is fairly stable over time.
The value of marginal product of labor is the increase in
A) revenue created by producing one more unit of output. B) revenue created by hiring one more unit of labor. C) total product necessary to make revenue increase by one dollar. D) total product generated by hiring one more unit of labor.
The strongest point in the case against activism is that
A) so many segments of private aggregate demand are unstable. B) activist policy, even if desirable, is too difficult to perform well enough. C) private aggregate demand is basically stable. D) policy rules for targets have been proven by the record of the Fed in the 1980s and 1990s to be perfectly feasible.