Author Question: Use the following statements to answer this question: I. The effective yield is generally easier to ... (Read 59 times)

lunatika · **on:** Jul 1, 2018

Use the following statements to answer this question: I. The effective yield is generally easier to compute for a perpetuity than for a 10-year bond. II.

Two perpetuities that have the same annual payment must have the same price, even if the issuers of the bonds are different companies. A) I and II are true.
B) I is true and II is false.
C) II is true and I is false.
D) I and II is false.

Question 2

Another commonly used algebraic form for a demand function is the semi-logarithmic functional form, ln(Q) = a - bP + cI, where Q is quantity demanded, P is the product price, and I is income.

Here, 100 c represents the percentage change in quantity demanded given a one unit increase in income. For a normal good, we should expect the value of c to be: A) positive.
B) negative.
C) positive or negative.
D) We do not have enough information to answer this question.