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1 year ago

What is the current yield for a $1000 corporate bond that pays 8.0 percent and has a current market value of $870?

Business

1 answer:

alexandr402 [8]1 year ago

4 0

The current yield for a corporate bond = 9.19 %

Calculation :

Amount of annual interest = face value × rate of interest

= $1000 × 8.0

= 8000%

Then, Current yield = amount of annual interest / current price

= 8000% ÷ $870

= 9.19 %

Do corporate bonds pay interest?

Corporate bonds pay interest semi-annually, which suggests that, if the coupon is five percent, each $1000 bond can pay the bondholder a payment of $25 every six months--a total of $50 per year

What Is the Current Yield?

Current yield is an investment's annual income (interest or dividends) divided by the present price of the security. This measure examines the present price of a bond, instead of looking at its face value.

Learn more about current yield :

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Bank A has an increase in deposits of $20 million dollars and all bank reserve requirements are 10%. Bank A loans out the full a

dexar [7]

Answer:

Total increase in deposit = $54,200,000

Explanation:

given data

deposits = $20 million dollars

bank reserve = 10%

solution

we know that Deposit in bank A is = $20,000,000

and Reserve @ 10% = $2,000,000

Bank A loans or bank B deposit will be = $20,000,000 - $2,000,000

Bank A loans or bank B deposit = $18,000,000

here Reserve @ 10% = $1,800,000

Bank B loans or Bank C deposit will be here = $18,000,000 - $1,800,000

Bank B loans or Bank C deposit = $16,200,000

so that

Total increase in deposit will be = Bank A + Bank B + Bank C ...............1

put here value we get

Total increase in deposit = $20,000,000 + $18,000,000 + $16,200,000

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3 0

3 years ago

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RUDIKE [14]

Answer:

Letter a is correct. Distort incentives and this distortion causes markets to allocate resources inefficiently.

Explanation:

What happens is that when rates rise, it causes an imbalance in supply and demand, because at higher rates companies are forced to raise prices to offset tax costs, so the pass-through of consumer prices discourages consumption and as a consequence of less consumption, production also decreases, causing the inefficient allocation of market resources.

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Answer:

Correct answer is A.

2/12

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Answer:

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