The yield to maturity of a one-year, simple loan of $400 that requires an interest payment of $50 is ().
A. 5%
B. 8%
C. 12%
D. 12.5%
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Which of the following are true for a coupon bond?
A. When the coupon bond is priced at its face value, the yield to maturity equals the coupon rate.
B. The price of a coupon bond and the yield to maturity are positively related.
C. The yield to maturity is greater than the coupon rate when the bond price is above the par value.
D. All of the above are true.
A discount bond ().
A. is also called a coupon bond
B. is also called a zero-coupon bond
C. is also called a fixed-payment bond
D. is also called a corporate bond
When the price of a bond is ________ the equilibrium price, there is an excess demand for bonds and the price will ________.
A. above; rise
B. above; fall
C. below; fall
D. below; rise
Factors that determine the demand for an asset include changes in the ().
A. wealth of investors
B. liquidity of bonds relative to alternative assets
C. expected returns on bonds relative to alternative assets
D. risk of bonds relative to alternative assets
E. all of the above