Suppose that 2 years after the issue date (as in Part a) interest rates fell to 8%. Suppose further that the interest rate remained at 8% for the next 8 years. What would happen to the price of the bonds over time

Answers

Answer 1

Answer:

the first part of the question is missing, so I looked fro a similar one:

Suppose Hillard Manufacturing sold an issue of bonds with a 10-year maturity, a $1,000 par value, a 10% coupon rate, and semiannual interest payments.

the market price of the bond after 2 years:

PV of face value = $1,000 / (1 + 4%)¹⁶ = $533.91

PV of coupon payment = $50 x 11.652 (PV annuity factor, 4%, 16 periods) = $582.60

market price = $1,116.51

the market price of the bond after 5 years:

PV of face value = $1,000 / (1 + 4%)⁶ = $790.31

PV of coupon payment = $50 x 5.2421 (PV annuity factor, 4%, 6 periods) = $262.11

market price = $1,052.42

the market price of the bond after 7 years:

PV of face value = $1,000 / (1 + 4%)² = $924.56

PV of coupon payment = $50 x 1.8861 (PV annuity factor, 4%, 2 periods) = $94.31

market price = $1,018.87


Related Questions

You have $425 today which is enough to buy 17 shirts. If the price of shirts are expected to increase by 2% over the next year, what (precise) nominal rate would you have to earn to be able to buy 20 shirts next year

Answers

Answer:

The precise nominal rate you have to earn to be able to buy 20 shirts next year is $510.

Explanation:

a) Data and Calculations:

Earnings today = $425

Number of shirts bought = 17

Therefore, the cost of each shirt = $425/17 = $25

If the price of shirts increases by 2%, the new cost will be $25.50 ($25 * 1.02)

This implies that to be able to buy 20 shirts next year, you will earn $510 ($25.50 * 20).

b) In this case, earnings are influenced by the number and price of shirts needed next year.

Which factor of production brings together all the other factors of production? ______ brings together all the other factors of production.

Answers

Answer:

Entrepreneurship

Explanation:

Answer:

entrepreneurship

Explanation:

IKEA is very Sweden-centric; that is, they like doing it the Swedish way, from the names of the furniture to the management of the company. Sweden is a neutral country, so maybe this is the way to go for a global company, but is smart to be too centric to a specific country when you are a global corporation

Answers

Answer:

It can be a smart strategy if the country has a significant amount of soft power (power not on military or economic terms, but on cultural and social terms).

Explanation:

For example, Sweden is a country that enjoys a high level of prestige around the world, because it is a very well developed country, with a very high standard of living, an economic model that many people admire (the Nordic Model), and several cultural exports like Volvo cars, or ABBA, that enjoy popularity around the world.

IKEA, in that sense, is like another Swedish cultural export, and when people go to an IKEA, they go expecting to find something "Swedish", so in this sense, the strategy can clearly pay off because of the soft power that Sweden has.

what is the term to describe the emotion or feeling in your voice

Answers

Tone in my own personal opinion

Emotional prosody is the term to describe the emotion or feeling in your voice.

What are Emotions?

Emotions can be said as when there are changes in the feelings of a person that can be due to any reason like neurological effect in which according to the situation or the feelings, the emotion keeps on changing. There are various types of emotions like apprehension, rage, disgust, rudeness, guilt, misery, intrigue, surprise, and joy.

Emotional prosody means when a person is trying to interpret human emotion in a way that the voice of that person can easily tell you about the needs and what the person is feeling at a particular moment.

For example, when you are on a phone call, one may easily know if a person is feeling low or that they are sounding cheerful.

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Credit card balances are not considered to be money primarily because they: Multiple Choice are an asset used in making transactions. are rarely used to make purchases. are not part of people's wealth. do not represent an obligation to pay someone else.

Answers

Answer:

are not part of people's wealth.

Explanation:

Your credit card balance is basically how much you owe your credit card company or how much of your credit line you already used. Credit card balances do not increase individuals' wealth, they actually decrease it. Credit cards are short terms loans given by banks, i.e. liabilities.

A company is involved in a lawsuit for which the contingent liability is remote. How should the liability be treated on the balance sheet?

a. It should be disclosed in the notes only.
b. It should not be recorded and need not be disclosed.
c. It should be recorded as a current liability.
d. It should be recorded as a long-term liability.

Answers

Answer:

b. It should not be recorded and need not be disclosed.

Explanation:

A contingent liability must be recorded in the balance sheet only if its outcome is very probable and the company can estimate its cost.

If the liability is only possible or its amount cannot be determined exactly, then it must be disclosed in the footnotes.

If the liability is only a remote outcome, or it is unlikely to happen, then it doesn't need to be recorded or disclosed.

An individual who makes $32,000 per year anticipates retiring in 30 years. If their salary is increased by $600 each year and they deposit 10% of their yearly salary into a fund that earns 7% interest, what is the future worth at retirement?

Answers

Answer:

$366,287.15

Explanation:

Annual salary = $32000  

No. of years (n) = 30 years

Increment in salary = $600

Deposit rate = 10%

Interest rate (r) = 7% or 0.07

Growth rate (g) = Increment in salary \div annual salary

Growth rate = $600 \ $32000

Growth rate = 0.01875

First deposit = $32000 x 10% = $3200

Future worth = [First deposit \ (r - g)] x [(1 + r)n - (1 + g)n]

Future worth = [$3200 \ (0.07 - 0.01875)] x [(1 + 0.07)30 - (1 + 0.01875)30]

Future worth = [$3200 \ 0.05125] x [(1.07)30 - (1.01875)30]

Future worth = $62439.0243902 x [7.6122550423 - 1.7459373366]

Future worth = $62439.0243902 x 5.8663177057

Future worth = $366287.15

Hence, the future worth at retirement is $366,287.15

You borrow $10,000 today at a nominal rate of 5%; inflation for the past 10 years has been exactly 2%. Today, inflation instantly rises to 7% and stays that way for the duration of your loan. Based on the above information, ceteris paribus (all else equal), today: Group of answer choices

Answers

Here is the answer choice to the question

a. the real rate of interest on your loan is 14%.

b. the real rate of interest on your loan was previously 10% and is now 35%.

c. the real rate of interest on your loan is now –2%.

d. you will pay the lender back exactly $9,500.

e. you will pay the lender back exactly $10,700

Answer:

C. the real interest rate on your loan is now -2%

Explanation:

The real interest rate of can be gotten by subtracting the nominal interest rate from the inflation rate from nominal interest rate

Inflation rate = 7%

Nominal interest rate= 5%

= 5 percent - 7 percent

= -2%

The real interest rate can be defined as the rate of interest an investor, saver or lender is going to receive after they have allowed for inflation.

Who owns the factors of production in a planned economy?
A.
Individuals
B.
Nobody
C.
The church
D.
The government

Answers

Answer:

A. Individuals

Answer:

D.

Explanation:

Under a command economy, governments own the factors of production. This is also sometimes referred to as a planned economy. (I like to call it a command economy, but it's the same thing.)

The Wilson family has a disposable income of $60,000 annually. Currently, the Wilson family spends 80% of new disposable income on consumption. Assume that their marginal propensity to consume is 0.8 and that their autonomous consumption spending is equal to $10,000. What is the amount of the Wilson family's annual consumer spending

Answers

Answer:

the annual consumer spending is $58,000

Explanation:

The computation of the amount of the wilson family is shown below"

Annual consumer spending is

= Disposable income × marginal propensity to consume + autonomous consumption spending

= $60,000 × 0.8 + $10,000

= $48,000 + $10,000

= $58,000

hence, the annual consumer spending is $58,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered

What is the most important aspects of many businesses

Answers

making sure your customers are happy and pleased with what every you do/sale the customers are the people you want to please the most they are the consumers

Tallpenny Tower was built in 1985. However, the building has been constantly maintained and remodeled. In valuation terms, the building's _________ age is greater than the building's _________ age.
a) chronological age, effective age
b) effective age, chronological age
c) depreciated age, projected age
d) projected age, depreciated age

Answers

Answer:

a) chronological age, effective age

Explanation:

The chronological age of a building is simply how old it is in years: E.g. a house built in year 2000 is 20 years old.

The effective age of a building depends on the condition of the building and how well it has been maintained. E.g. two houses built on year 2000, but one has never gotten any type of maintenance and is really on a bad shape will have a higher effective age than the other house that has been continuously and properly maintained and repaired.

What do franchisees typically have to pay to the franchisor?
a. One-time franchise fee
b. Nominal fee for business knowledge
O c. Monthly royalties based on sales
d. One-time franchise fee and monthly royalties based on sales
O e. Approximately half of the franchise's profits each month

Answers

Answer:

E because I looked it up

Explanation:

e

Approximately half of the franchise's profits each month the franchisees typically have to pay to the franchisor. Thus, option E is appropriate.

An alliance between a franchisor with a franchisee is known as a franchise. The original company is the franchisor. It promises to sell a license for its name and idea. The franchisee invests in the right to promote and advertise the franchisor's products and services using an established brand business strategy.

If you purchase a franchise either an investor or a franchise, you can operate a business. You receive a format originator system created by the business (franchisor), a license to use its name for a predetermined period, and help in exchange for paying a franchise fee.

Thus, option E is correct.

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The only business that is directly protected by the U.S. Constitution (in the First Amendment) is:_______

a. interest group lobbying.
b. health care.
c. polling.
d. the press (the news media).
e. software development.

Answers

Answer:

d. the press (the news media).

Explanation:

The only business protected by the First Amendment is the press (the news media). The other aspects protected by the First Amendments are human rights and not a business. The press is protected because they serve as countrywide investigators to uncover the truth and inform the people, this also includes the truth of any government actions, scandals, or secrets being held from the public eye. This is because in a democracy the government is accountable for the people and not the other way around.

According to the basic quantity equation of money, if price and output fall while velocity increases, then:

Answers

Answer:

The quantity of money will fall

Explanation:

basic quantity equation of money's theory stressed that the general price of goods/services is attributed to the flow of money in circulation, I.e they have a linear relationship.The equation below gives the relationship between the quantity of money as well as price level. MV = PT

Where M = quantity of money

V =velocity of circulation

P = price level

According to the basic quantity equation of money, It should be noted that if price and output fall while velocity increases, then The quantity of money will fall.

MCQS
(i) Compensation of employees includes ________.
(a) wages, salaries, fringe benefits, Social Security contributions, and health and pension plans
(b) wages, salaries and taxes
(c) wages, salaries taxes and zakat
(d) non of the above
(ii) The difference between the income received from abroad for rendering factor services by the normal residents of the country to the rest of the world and income paid for the factor services rendered by nonresidents in the domestic territory of a country is known as-------
(a) Net Factor Income from Abroad
(b) Capital Consumption Allowances
(c) Depreciation
(d) None of these
(iii) Suppose that in year 1 an economy produces 75 unit of apple that sell for $5 each and 100 mobile that sell for $6 each. The next year the economy produces 110 apple that sell for $3.75 each and 80 mobile that sell for $5 each. The real GDP is
(a) 812.5
(b) 975
(c) 1030
(d) 980

(iv) What of the following does NOT enter GDP?
(a) Public Service
(b) Public education
(c) Life Expectancy
(d) National Defence

(v) The sum of all kinds of income received by the individuals from all sources is called---------
(a) Personal Income
(b) Private Income
(c) Personal Disposable Income
(d) None

Answers

Answer:

MCQS

(i) Compensation of employees includes ________.

(a) wages, salaries, fringe benefits, Social Security contributions, and health and pension plans .

(ii) The difference between the income received from abroad for rendering factor services by the normal residents of the country to the rest of the world and income paid for the factor services rendered by nonresidents in the domestic territory of a country is known as-------

(a) Net Factor Income from Abroad .

(iii) Suppose that in year 1 an economy produces 75 unit of apple that sell for $5 each and 100 mobile that sell for $6 each. The next year the economy produces 110 apple that sell for $3.75 each and 80 mobile that sell for $5 each. The real GDP is

(c) 1030 .

(iv) What of the following does NOT enter GDP?

(c) Life Expectancy.

(v) The sum of all kinds of income received by the individuals from all sources is called---------

(a) Personal Income.

Explanation:

1) Employee Compensation includes the salaries, wages, benefits, and other incentives paid to employees in exchange for their services to the company.

3) The Net factor income from abroad is the difference between the factor income earned from abroad by normal US residents and the factor income earned by non-residents (foreigners) in the US domestic territory.

4) The real GDP is the gross domestic product adjusted for the effect of inflation on prices.  The real GDP for year 2 should be based on the prices of year 1 and is calculated as follows (110 * 5 + 80 * 6 = 1030).

5) Personal income is the sum of all kinds of income received by the individuals from all sources.  It is used in the calculation of the US GDP.  It is a subset of private income.  Private income, which is broader than personal income, consists of personal income, profit tax, and undistributed profit.

The manager of Lawn and Garden Services would like to estimate the proportion of her employees' time spent performing various gardening and lawn care activities. She has made 400 random observations of a typical worker, with the following results:
Activity Time Observed
Mowing 200
Trimming 80
Raking 40
Miscellaneous 80
What is the probability that the true proportion of time spent mowing is exactly equal to the sample proportion?
a) 1
b) 0
c) .5
d) .2
e) 1

Answers

Answer:

b) 0

Explanation:

In this case, the manager observed that a worker spent 50% of his/her time mowing the garden, but in case this is correct, it would only apply to this worker. She would need to collect data and analyze it from a much larger sample which includes other workers in order to determine if this proportion applies to whole group. You cannot infer a conclusion based on a limited amount of data collected from just one subject. The methodology is incorrect.

How can formal business documents help managers solve problems? A. By presenting well-organized, accurate information about a problem O B. By eliminating the need for schedules and budgets to track progress C. By making decisions so the managers do not have to handle them O D. By creating a record of every action taken during a meeting ​

Answers

Answer:

the answer is A

Explanation:

According to the video, what is the main purpose of Insurance Underwriters’ work?
to protect insurance companies
to investigate insurance claims
to sell insurance policies
to advise individual investors

Answers

Answer:

A

Explanation:

just did it lol

Answer:

A. to protect insurance companies

Explanation: Just got done on edge

If you have to reject a job offer because it isn't what you wanted, what is the best step to take?


a.
Say no at the interview to save the employer time
b.
Do not call the interviewer back
c.
Call the interviewer back, thank them, and give a reason for your answer
d.
Call the interviewer and let them know you would never work for them

Answers

C because it is the the answer

Answer:

Call the interviewer back, thank them, and give a reason for your answer

Explanation:

1.Provide definitions of throughput, inventory and operational expense given in The Goal. How do they compare with traditional definitions

Answers

Answer:

The Goal:

This involves increasing net profit and as this is done, return on investment is increased and cash flow is also increased.

Throughput can be defined as the rate by which money is being generated by the system through sales.

Inventory is all amount of money that is currently in the system. It is all the amount of money that has been invested in buying things which the system has intentions of selling.

Operational expense is all amount of money that has been spent by the system in trying to turn inventory into throughput.

Compared to traditional definitions they are almost basically with the same meaning.

Which type of data do companies collect from customers or potential customers?
A. Positioning data
B. Market share data
C. Primary data
D. Secondary data

Answers

Answer: Primary data

Explanation: There are essentially three different ways that companies collect data about their customers. By asking them directly for it, indirectly tracking them, and by acquiring it from other companies.

To set up a business account on Pinterest, a brand will need to provide a / an __________.
a. Mailing address, user name, business name, website and business category.
b. Mailing address, password, business name, website and business category.
c. Email address, password, personal name, website and business category.
d. Email address, password, business name, website and business category.

Answers

Answer:

b

Explanation:

An asset used in a four-year project falls in the five-year MACRS class for tax purposes The asset has an acquisition cost of $5,100,000 and will be sold for $1,600,000 at the end of the project. If the tax rate is 21 percent, what is the aftertax salvage value of the asset? Refer to Table 10.7 (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

Answers

Answer:

$1,449,068.80

Explanation:

Book value on purchase                    $5,100,000

Less: Accumulated depreciation       $4,218,720

(5,100,000*(0.2+0.32+0.192+0.1152)                    

Book value on sales                            $881,280

Salvage value of paint   $1,600,000

Book value of as set      $881,280  

Gain on disposal            $718,720

Tax on gain on disposal = $718,720 * 21% = $150,931.20

After tax cash flow = $1,600,000 - $150,931.20

After tax cash flow = $1,449,068.80

The main reason most international transactions require full payment before the buyer receives the merchandise is:_____.
a. strict government regulations.
b. an underlying lack of trust. an excess of factor endowments.
c. to trigger lower tariffs.
d. the inability to charge interest on the cost of goods.

Answers

Answer: b. an underlying lack of trust.

Explanation:

When dealing with an international customer, there is no guarantee that the customer will pay you if they receive their merchandise first and if this should happen, getting the person to pay you can be quite cumbersome and expensive.

It is therefore better that the customer sends the full payment first because money has a better chance of being retrieved than goods that are delivered. Using payment websites like PayPal for instance ensure buyer protection so money can be retrieved if goods are not sent. If the reverse were true however, this would be more difficult.

So yes, there is an underlying lack of trust.

Note: An excess of factor endowments is a separate option.

People do things for different reasons. The main reason most international transactions require full paymentbefore the buyer receives the merchandise is an underlying lack of trust.

If there is lacks of trust in business transactions, it allows a lot of harmful thoughts, actions, or emotions.

The lack of trust has lead to hopelessness, depression and possibly consider harming themselves.

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A deposit of $1000 is made in a bank account that pays 24% interest per year compounded quarterly. Approximately how much money will be in the account after 10 years

Answers

Answer:

$10,285.72

Explanation:

In this scenario, we can use the compound interest formula to calculate the total after 10 years. The formula is the  A = P * [tex](1 + r/n)^{nt}[/tex]

where,

A = final value after interest

P = initial investment amount

r = annual interest rate in decimal form

n = number of time the interest is compounded based on t

t = total amount of time

In this case, the interest is compounded quarterly meaning 4 times a year, therefore we can plug all the values into the formula and solve for A

A = P * [tex](1 + r/n)^{nt}[/tex]

A = 1000 * [tex](1 + 0.24/4)^{4*10}[/tex]

A = 1000 * [tex](1.06)^{40}[/tex]

A = 1000 * 10.2857

A = 10,285.72

Therefore after 10 years the account will have a total of $10,285.72

A stock had returns of 18.58%, -5.58%, and 20.81% for the past three years. What is the variance of returns?

Answers

Answer:

Variance = 0.02141851

Explanation:

We first calculate the mean for the stocks

Mean = (0.1858 - 0.0558 + 0.2081) / 3

Mean = 0.3381 / 3

Mean = 0.1127

Variance = [(0.1858 - 0.1127)^2 + (- 0.0558 - 0.1127)^2 + (0.2081 - 0.1127)^2] / 3 -1

Variance = [0.0731^2 + (-0.1685^2) + 0.0954^2] / 2

Variance = 0.00534361 + 0.02839225 + 0.00910116 / 2

Variance = 0.04283702 / 2

Variance = 0.02141851

The variance of returns is 0.02141851

1. If rs increases to 10%, what would be the value of the constant growth stock? (Note: D0 is $1.15 and the expected constant growth rate g = 4%.)

Answers

Answer: 19.93

Explanation:

The constant growth stock is $19.16. P = D/(r-g), where P is the current price, D is the next dividend to be paid, g is the expected dividend growth rate, and r is the required rate of return for the company.

What is a Constant growth rate?

A constant growth rate is defined as the average rate of return on investment over the time period required to achieve the total growth percentage that an investor seeks.

Given

Rate (r) = 10%

Growth (g) = 4%

Dividend (D) = $1.15

Required to calculate growth stock =?

growth stock P = D/(r-g)

growth stock = 1.15 / (10 - 4) = $19.16

Thus, the constant growth is $19.16. A constant growth rate is defined as the average rate of return on an investment during the time period required to achieve the total growth percentage desired by the investor.

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QUESTION 22 In a competitive market, A. no single buyer or seller can influence the price of the product. B. there are only a small number of sellers. C. the goods offered by the different sellers are unique. D. accounting profit is driven to zero as firms freely enter and exit the market.

Answers

Answer:

A

Explanation:

In a competitive market there are no single buyer or seller that can influence the price of the product.

Such a market has numerous producers who compete with each other to provide goods and services. Not one producer can influence the market prices by increasing his output or by decreasing it.

Same goes for the consumer. One consumer can not influence the prices either.

Hal is enrolled for one class at a local community college; tuition cost him $190. Hal's AGI is $20,000. Before considering a limitation due to tax liability, Hal can take a lifetime learning credit of:

Answers

Answer:

the lifetime learning credit is $38

Explanation:

The computation of the lifetime learning credit is shown below:

= 20% of tuition cost

= 20% of $190

= $38

Hence, the lifetime learning credit is $38

We simply applied the above formula so that the correct value could come

And, the same is to be considered

he is eligible for 20% only so the same is relevant

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PLEASE HELP FAST: 15 POINTS!!1. Create a sentence using each of the homonyms for the given word. You can create two sentences or one sentence using both homonyms.holey (meaning full of holes) - These socks are holey.2. Create a sentence using each of the homonyms for the given word. You can create two sentences or one sentence using both homonyms.I'll (meaning I will) - I'll tell you a story. Which culture dominates North Asia?ChineseIndianKoreanRussian Find the value of X101925487 In what way did the research of William Harvey affect modern science? (4 points) aHe changed old ideas about human anatomy. bHe made advances in geometry and probability. cHe first used a microscope to study the human body. dHe discovered that the heart is where circulation starts. pls Select the correct answer.During an excursion, an archaeologist finds an ecologically important area. Which organization should the archaeologist approach to conserve the land?A. SERI/ NRELB. IPCCC. Nature ConservancyD. MMPAE. NOAA what is the volume of a 8 cm Cube Which of the following is not a controllable risk factor?a. smokingb. inactivityc. agingd. over eating The equation that represents Runner #2 is t = 8.5d where t is time (in minutes) and d is distance in miles). IfRunner #2 runs 2 miles, how many minutes will it take? The Wilson family has a disposable income of $60,000 annually. Currently, the Wilson family spends 80% of new disposable income on consumption. Assume that their marginal propensity to consume is 0.8 and that their autonomous consumption spending is equal to $10,000. What is the amount of the Wilson family's annual consumer spending 10. A(n) eclipse occurs at a full moon when Earth is directly between the moon and the sun. What is the slope and equation of a line perpendicular to the y-axis passing through point (5, 3)? Highborn Elizabethan women lived difficult, suffocating lives with many rules and few choices. In the sentence, the writer describesthe central idea.a general opinion.a supporting detail.the authors purpose. plzzz need help plzzz WILL GIVE BRIANLEST 4. Name one internal conflict from Act One in Anne frank is HURRY PLZ The period of a pendulum is the time the pendulum takes to swing back and forth. The function L=0.81t^2 relates the length L in feet of a pendulum to the time t in seconds that it takes to swing back and forth. A convention center has a pendulum that is 110 feet long. Find the period. A construction company is setting up signs on a 6 3/4 mile stretch of road. If the company places a sign every 3/4 of a mile, how many signs will it need?Note: the company will place a Sign at the beginning of the stretch,then every 3/4 of a mile. Tendency of an object to float provide a simple explanation for water in nutrition (health). thanks :) You work in a hospital, and instructions for an instrument state that it should be cleaned in thesterilizer for two hours. The sterilizer requires cleaning time be entered in minutes. How manyminutes do you set for the sterilizer?A. 90B. 120C. 180D. 240E. 500 George, a musician, works 35 hours in a week. If he earns $18.15 per hour, how much does he earn each week?