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2 years ago

Which would you rather be owning if there is a decline in market interest rates: long-term bonds or short-term bonds? why?

1 answer:

3 0

Long-term bonds are preferable to hold if interest rates decrease because their price will rise more than the price of short-term bonds, providing a bigger return. Long-term bonds, however, are more susceptible to interest-rate risk. In addition, the longevity of the bonds, not only their term to maturity, is a major factor.

<h3>What are short-term bonds?</h3>

Short-term bonds may offer consistent income with comparatively little risk. When compared to money markets, higher profits can be obtained. Even some bonds are tax-free.

The potential yield of a short-term bond is higher than that of money market investments. Bonds having shorter maturities are often more resistant to changes in interest rates than other types of assets. Purchasing a bond and keeping it until it matures entitles you to the stated principle and interest rates.

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Pushes herself and is determined to finish something she started.

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3 years ago

Consider a stock priced at $30 with a standard deviation of 0.3. The risk-free rate is 0.05. There are put and call options avai

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Answer:

-$11

Explanation:

Covered Call involves Buy stocks and Sell call options

Earning $2.89 by selling call. So, at stock price of $27, the payoff from options is $2.89 per option

Options Profits = $2.89 * 100

Options Profits = $289

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Profit of stock = -$300

Investor Net Profit = Profit of stock + Options Profits

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3 years ago

VI. Here we consider the paradox of saving one last time in the context of the AS-AD model. Suppose the economy begins with outp

Nonamiya [84]

Answer:

The solution to this question can be defined as follows:

Explanation:

In point a:

When consumer interest decreases, => consumers begin and save less and more, => MPC decreases; => the "IS" curve becomes flatter; => "IS" turns inside. Currently, 'AD' shows together all the goods and financial sector, => as the 'IS' curve adjusts inside the industry, => the 'AD' would also change to the left.

In point b:

Take into account the SR models of "IS-LM" and "AD-AS."

Therefore there is the case of a full job only at the beginning; => its optimum between "IS1" and "LM" in the "IS-LM" model; as well as the main equilibrium among "AD1" and "AS" in the "AD-AS" model "E1'," => the original equilibrium among "Y=Yf," "r=r1" and "P=P1." That now the consumer is reducing the confidence, => the 'IS' curve becomes shifting IMEI 'IS2,' => provided the 'LM' curve, that new balance is 'E2.' That's why the price in the SR is calculated, the AS will change =>, however, the AD also will shift the "AD2" side and "E2'" will become the equilibrium point in the "AD-AS" system, "r=r2 <r1" and "P=P1" throughout the new "Y=Y2 <Yf" balance.

Please find the graph file in the attachment.

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3 years ago

A company implementing a(n) ____ strategy would demonstrate the greatest willingness on the part of the company to meet or excee

Allushta [10]

The answer would be : Proactive strategy

Proactive strategy is carried out to prevent the occurrence of challenging behavior from the society towards the company. Company with proactive strategy tend to do a lot of Corporate social Responsibilities to win the crowd's favor.

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3 years ago

Assume Chester Corp. is downsizing the size of their workforce by 20% (to the nearest person) next year from various strategic i

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Answer:

$311,100

Explanation:

Solution

Recall that:

Assume Chester corp downsized the size of their workforce by = %

The exit interviews cost estimated = 100

Additional normal costs of separation = $5000

Now,

The Total Employee = 305

The Down Sizing = 20%

Thus,

The Total Employee = 305 x 20% = 61 employees

so,

The Separation cost per employees = $5000

The Exit interview cost = $100

Total cost = $5,100

Now,

The total overall cost of separation = 61 employees x total cost of separation per employees

Which is,

= 61 x 5100 = = $311,100

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4 years ago