A ten-year $1,000,000-face-value zero-coupon Treasury bond has a market price of __________ when the interest rate is 9.62%
A) $399,119
B) $674,844
C) $903,800
D) $962,000
A
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Refer to Figure 13-1. Ceteris paribus, an increase in interest rates would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a voluntary production reduction program to achieve their goal. What is the size of the producer surplus?
A. $8 billion B. $4.5 billion C. $12.5 billion D. $6.5 billion
Suppose you were working for Richstone's bakery and calculating whether the bakery was making a profit, considering the recent increase in rent. You have data for price (P), MR, ATC, MC, AVC, at the quantity of 1,000 breads a day. Among the other relationships you consider is (P – ATC) which measures the firm's
a. total profit b. profit per unit of output c. marginal profit d. total revenue e. average variable cost