A. Because the yield to maturity is less than the coupon rate, the bond is trading at a discount. FALSE
<u>Explanation:</u> If the yield to maturity (YTM) is less than the Coupon rate (CR) the bond is trading at a premium
B. Because the yield to maturity is greater than the coupon rate, the bond is trading at par. FALSE
<u>Explanation:</u> If the yield to maturity (YTM) is greater than the Coupon rate (CR) the bond is trading at a discount.
C. Because the yield to maturity is less than the coupon rate, the bond is trading at a premium. TRUE
D. Because the yield to maturity is greater than the coupon rate, the bond is trading at a premium. TRUE
The correct answer to this question is C
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Answer: b. movement along SRAS
Explanation:
When the price level changes due to an increase in the demand that forces the Aggregate demand curve to shift rightward, the immediate effect would be that the Aggregate demand curve would intersect the Short Run Aggregate supply at a new point.
This new point will see a movement <em>along </em>the SRAS from its previous equilibrium point to the new equilibrium intersection point with the AD curve. In other words, the new point will be on the same SRAS curve just moving from one point to another.
Answer:
C. Marketing and administration
Explanation:
Non manufacturing cost are cost that are not related to the production process.
Non manufacturing cost are period cost which are treated as expenses and deducted from the revenue of the period in which they are incurred. Non manufacturing cost includes selling expenses, distribution expenses, administration expenses, marketing expenses and all other expenses that is related to trading and not manufacturing.
Answer: GHI Bonds
Explanation:
All the bonds are of equal maturity so the only relevant variable is the bond yield.
Bond prices are inversely related to the market interest rate for the simple reason that bond yield is fixed. As a result when interest rates go up, they will become less attractive because they will be paying older and lower rates than the newer rates.
This is especially true for bonds with lower yields which is why GHI Bonds will show the greatest change in price.
For instance, suppose interest rates in the economy were 6% and increased to 8%, the attractiveness of the 5% bond would decrease the most because there is a chance to earn 3% more in the market than from that bond.