9. A 10-year bond sells for its face value of $10,000, with an annual coupon of $250.Because of expected economic growth, the inital bondholder sells it for $12,500. Whatis the bond's new yield?(A) 25 percent.(B) 2.5 percent.(C) 2 percent.(D) 20 percent.10. What does expected future inflation do to the market for bonds?(A) Supply increases; prices decline and yields rise.(B) Demand increases: prices rise and yields decline.(C) Supply decreases: prices rise and yields decline.(D) Demand decreases: prices decline and yields rise.11. Which of the following statements is TRUE?(A) ETFS consist of funds that invest only in stocks.(B) Commercial real estate performs well during economic downturns.(C) Bitcoin is most secure when held on a coin exchange.(D) ETFS generally outperform mutual funds and have lower fees.12. Which of the following is most likely to cause an increase in demand for loanablefunds?(A) Banks fail across the nation, and are unable to return their depositors' money.(B) The Financial Post releases a widely-read article, claiming that consumer andbusiness confidence have declined.(C) The government provides a large tax credit for those who save money in banks.(D) The government reduces taxes on businesses, making investment more profitable.

9. Bond new yield = coupon payment / selling price * 100 = 250/12500 * 100 = 2 % Answer is…

9. A 10-year bond sells for its face value of $10,000, with an annual coupon of $250. Because of expected economic growth, the inital bondholder sells it for $12,500. What is the bond's new yield? (А) 25 рercent. (В) 2.5 рercent. (C) 2 percent. (D) 20 рercent.

9. A 10-year bond sells for its face value of $10,000, with an annual coupon of $250. Because of expected economic growth, the inital bondholder sells it for $12,500. What is the bond's new yield? (А) 25 рercent. (В) 2.5 рercent. (C) 2 percent. (D) 20 рercent.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 5SCQ: Investors sometimes fear that a high-risk investment is especially likely to have low returns. Is...

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