The full sentence is the following: Bank capital has both benefits and costs for the bank owners. Higher bank capital <em>reduces </em>the likelihood of bankruptcy, but higher bank capital <em>reduces </em>the return on equity for a given return on assets
When the price of ground beef increases, this means that there is an increase in the cost of production of hamburgers because the beef is used as an input in the production of hamburgers.
So, an increase in the price of beef will result in a decrease in the supply of hamburgers because it will become less profitable for the suppliers and this will also shifts the supply curve leftwards.
Hence, this lower supply of hamburgers will cause the price of hamburgers to rise.
The bond can be issued at par, at a discount or at a premium depending on the coupon rate and the market interest. The price of the bond which pays semi annual coupon can be calculated using the formula of bond price. The formula to calculate the price of the bond is attached.
First we need to determine the semi annual coupon payment, periods and YTM.