Author Question: You have a bond that pays 60 per year in coupon payments. Which of the following would result in a ... (Read 54 times)

cookcarl · **on:** Jun 29, 2018

You have a bond that pays 60 per year in coupon payments. Which of the following would result in a decrease in the price of your bond?

A) Coupon payments on newly-issued bonds rise to 75 per year.
B) The likelihood that the firm issuing your bond will default on debt decreases.
C) Coupon payments on newly-issued bonds fall to 40 per year.
D) The price of a share of stock in the company rises.

Question 2

Automobiles and many other products are differentiated. As a result

A) consumers of automobiles have difficulty deciding what type of imported automobile to buy.
B) we see countries specializing completely in the production of automobiles.
C) different countries may each have a comparative advantage in producing different types of automobiles.
D) the quality of imported automobiles is less than it could be.