Answer:
The bond should sell for a price of $59.74 today.
Explanation:
Zero Coupon Bond is a bond which does not offer any interest payment but it is issued at deep discount amount from the face value of the bond.
Price of Zero Coupon Bond =
F = Face / Par Value of Bond = $1,000
r = rate of interest = 11%
n = number of years = 27 years
Price of Bond =
Price of Bond = $59.74
As Zero coupon bond does not offer any discount so, it is valued much below the par value.
Answer:
d. leverage
Explanation:
Leverage -
It is a type of investment strategy , where the borrowed money is used .
It is the method by which the firm or an organisation is expanded by using the borrowed money as the capital and funding , is referred to as leverage .
Hence , from the given scenario of the question,
The person uses borrowed money to increase the potential return of an investment .
Hence , from the question,
The correct term is leverage .
Answer: A. The insurer may cancel it after the premium has been paid by the insured
Explanation: Immediately the premium has been paid, it will be impossible to cancel the Supplemental Extended Reporting Period Endorsement.
•Supplemental Extended Reporting Period is an added time after the expiration of the liability policy that permits policyholders to report a claim and get coverage, such claims will no longer be covered once the supplemental extended reporting period policy ends.
Answer:
The correct answer is Opportunity cost.
Explanation:
The opportunity cost is understood as the cost incurred in making a decision and not another. It is that value or utility that is sacrificed for choosing an alternative A and neglecting an alternative B. Taking a path means that the benefit offered by the discarded path is waived.
In any decision taken there is an implicit waiver of the utility or benefits that could have been obtained if any other decision had been made.
For each situation there is always more than one way to address it, and each form offers a greater or lesser utility than the others, therefore, whenever one or the other decision is made, the opportunities and possibilities offered by the others will have been renounced, that may be better or worse (opportunity cost greater or lesser).