Multiple Choice
Suppose a bond sells for $2, 000 and pays $200 per year in interest.What will happen to the current interest rate if the price of the bond changes to $1, 800?
A) It decreases by 10 percentage points.
B) It increases by 10 percentage points.
C) It remains unchanged.
D) It increases by 1 percentage point.
E) It decreases by 1 percentage point.
Correct Answer:
Verified
Correct Answer:
Verified
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