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BlackZzzverrR [31]
2 years ago
8

The five 10-year semi-annual coupon bonds listed below are of comparable risk and have the same call provision: 5 years of call

protection (NC-5), after which bonds are callable at 105% of par in the 6th year and declining ratably thereafter (103.75, 102.5, 101.25 and par in years 7, 8, 9, and 10, respectively). Which of these bonds appears to face the highest call risk
Business
1 answer:
love history [14]2 years ago
7 0

The bond that has the highest call risk based on the groups is A bond priced at 90 with 8 years to maturity.

<h3>What is the call risk of a bond?</h3>

This is the risk that a person that issues bonds would have to redeem the bond before it gets to its maturity. The bond would be a callable bond.

The holder of the bond is going to get value based on the price of this bond.

<h3>Complete question</h3>

The five 10-year semi-annual coupon bonds listed below are of comparable risk and have the same call provision: 5 years of call protection (NC-5), after which bonds are callable at 105% of par in the 6th year and declining ratably thereafter (103.75, 102.5, 101.25 and par in years 7, 8, 9, and 10, respectively). Which of these bonds appears to face the highest call risk?

A bond priced at 90 with 2 years to maturity

A bond priced at 90 with 8 years to maturity

A bond priced at 105 with 4 years to maturity

A bond priced at 115 with 2 years to maturity

A bond priced at 120 with 2 years to maturity

Read more on bonds here:

brainly.com/question/25965295

#SPJ1

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3 0
3 years ago
Which of the following costs would continue to be incurred even if a segment is eliminated? A. Direct fixed expenses B. Variable
stich3 [128]

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This is the case, for example, of payments such as leasing, since this, if nothing is sold, must be paid. It also happens with almost all labor payments, public services, insurance, etc.

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7 0
3 years ago
Regarding the overall effect of negative interest rates on the economy, economists
vova2212 [387]

Answer:

The effect of negative interest rates on the economy is reflected in option D:  negative interest rates simply cannot happen in reality.  Answer D is the correct response.

Explanation:

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The effect of this model is negative on the economy since it will not provide enough resources for stimulation.  Also, it will not slow it down since it is not expected that an instrument with negative interest rates will be accepted, in the form of bonuses, by customers; or loans, provided by banks.

8 0
2 years ago
Each day, Tasty Tortilla Company incurs total costs of $8,000 to process flour into tortillas. The company can sell the tortilla
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Answer:

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3 0
3 years ago
Brief exercise 8-1 ortega company manufactures computer hard drives. the market for hard drives is very competitive. the current
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The profit that is gained by the company for selling a unit is equal to the difference between the revenue and total cost. In this item the revenue is given to be $45 and the profit is $10. To answer this item, we let x be the cost such that,

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Simplifying,

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3 0
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