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Question 71 2 pts A twenty-year bond has a 5% coupon. Yesterday, its yield-to-maturity was 5%. Interest rates rose today, which caused the bond's yield
Question 71 2 pts A twenty-year bond has a 5% coupon. Yesterday, its yield-to-maturity was 5%. Interest rates rose today, which caused the bond's yield to rise as well. Which of the following is true of the bond's price? a) Yesterday it was at a premium, today it is at a discount. b) Yesterday it was at a discount, today it is at a premium. O c) Yesterday it was at par, today it is at a discount. d) Yesterday it was at a discount, today it is at par. O e) Yesterday it was at par, today it is at a premium. Question 72 2 pts Federal Reserve chairman Powell recently testified before Congress. He said (though not in these words) that the Fed will likely accelerate its "tapering" (liquidity reduction) due to the reduction in the GDP Gap. What did he mean? a) The gap between nominal and real interest rates has widened. b) The interest rate gap for U.S. banks has worsened. Oc) The gap between household earnings and spending has widened (i.e., the savings rate has risen). d) The gap between potential and actual GDP has narrowed. O e) The difference between imports and exports (the trade deficit) has increased
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