Kim recently purchased a perpetual bond for $1,000. The bond pays $50 in interest per year. If market interest rates rise to 7% after her purchase, the price of the bond:
A) falls to $700.
B) rises to $1,700.
C) falls to $714.
D) rises to $1,070.
Correct Answer:
Verified
Q64: Institutions that acquire funds from savers and
Q85: If a perpetuity bond has an interest
Q128: The yield on a perpetuity bond that
Q136: Jody purchases a stock from her employer,
Q154: To increase the level of safety in
Q179: The reason bond prices and interest rates
Q222: When a financial institution provides a standardized
Q231: Financial intermediaries include all of these EXCEPT
A)
Q245: Which of these is NOT a primary
Q271: The price of a bond is equal
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents