Answer:
The current value of the Bond is $807.03
Explanation:
The price of the bond can be calculated by taking the present values of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond.
According to the given data
Face value of the bond = F = $1,000
Coupon payment = C = $1,000 x 4.5% x 6/12 = $22.5 Semiannually
Number of periods = n = 25 years x 2 = 50 period
s
YTM = 6% / 2 = 3%
Price of the bond is calculated by using following formula:
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Placing all the available values in the formula
Price of the Bond = $22.5 x [ ( 1 - ( 1 + 3% )^-50 ) / 3% ] + [ $1,000 / ( 1 + 3% )^50 ]
Price of the Bond = $578.92 + $228.11
Price of the Bond = $807.03
Answer:
In the country that promotes free-market economy is expected to start seeing firms arriving in this country and invest in those activities where this country has a comparative advantage.
Explanation:
This would lead to an efficient allocation of productive resources taking the economy to optimum production. The technology and tools will rapidly spread, and the industrialization process will be achieved. In the other country, investment and technology implementation is lead by the government allocating resources inefficiently and delaying industrialization.
Answer: groupthink
Explanation:
Following the information given in the question, it can be deduced that Steve is being adversely influenced by groupthink.
Groupthink is when a group of people reach a consensus and agree on a particular thing without thinking about other alternatives or the consequences. Groupthink is typically based on the desire not to upset others. In this case, Steve doesn't want to upset and dispute the claims of others.
Answer:
Explanation:
As auditor, I may not agree with the policy that is been changed. It
is believed that, by default there is a normal loan risk that is been associated with the business of Pacific Bank. A way to help reduce this risk is to carefully asses the loan applications. Loans that are large has greater risk in the event of default compared to smaller loans. Therefore, it is reasonable to have more than several individual involved in decision making give a loan that is very big. In addition, loans should be given base on those that meet the requirements, it should not be on the base on favoritism or people with relationship with bank president. Giving the bank president the power to give huge loans may lead to him granting loans to people who he is familiar with, without the required due process been followed. This may cause the bank to be credit exposed risks that are poor.
Answer: Option (C) is correct.
Explanation:
National Savings is divided into two parts, private savings and public savings.
Private Savings = GDP - Taxes + Transfer payments - Consumption Spending
= Y - T + TR - C
= 12 - 3 + 2 - 9
= $ 2 trillion
Public Savings = Taxes - Government Spending - Transfer payments
= 3 - 0 - 2
= $1 trillion
∴ Option (C) is correct.
Private saving = $2 trillion and public saving = $1 trillion.