Multiple Choice
When a perpetual bond with a face value of $1,000 is issued, general interest rates are 3%, so the annual interest payment is _____. After the bond is issued, market interest rates rise to 4%, which forces the price of the bond to _____ to _____.
A) $3; rise; $750
B) $3; fall; $75
C) $30; rise; $750
D) $30; fall; $750
Correct Answer:
Verified
Correct Answer:
Verified
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