The most common type of family structure for u.s. children aged 6 to 11 is:

An investor is contemplating the purchase of a 20-year bond that pays $50 interest every six months. the investor plans to hold

irinina [24]

Answer: The investor should be willing to pay <u>$927.68 </u>for the bond today.

We in need to compute the price at which the investor can sell the bond in year 10 (Y10).

The price of the bond in year 10 will be the present value of the coupons over the remaining life of the bond and the maturity value of the bond after 20 years.

We have

Coupon Value (C ) $50.00

No. of coupons remaining (n) 20

Expected YTM in year 10 0.08

Expected semi annual YTM in year 10 $\frac{0.08}{2} =0.04$

Face (Maturity) Value of the bond (MV) $1,000.00

The bond price in year 10 will be

$\mathbf{Bond Price_{Y10}=C*\left ( \frac{1-(1+r)^{-n}}{r}\right )+\frac{MV}{(1+r)^{n}}}$

Substituting the values we get,

$Bond Price_{Y10}=50*\left ( \frac{1-(1+0.04)^{-20}}{0.04}\right )+\frac{1000}{(1+0.04)^{20}}$

$Bond Price_{Y10}=50*\left (13.59\right )+\frac{1000}{2.19}$

$\mathbf{Bond Price_{Y10}= 679.52+ 456.39 = 1,135.90}$

<u>Hence the investor can expect to sell the bond in year 10 at $1,135.90.</u>

Now, we'll calculate the price the investor is willing to pay for the bond. The investor can expected to pay the Present Value of the coupons she'll receive over 10 years and the selling price of the bond 10 years from now. We discount the cash flows at the rate of return the investor expects.

We have

Coupon Value (C ) $50.00

No. of coupons remaining (n) 20

Expected rate of return 0.12

Expected semi annual rate of return $\frac{0.12}{2} =0.06$

Selling Price of the bond (SP) $1,135.90

$\mathbf{Bond Price=C*\left ( \frac{1-(1+r)^{-n}}{r}\right )+\frac{SP}{(1+r)^{n}}}$

Substituting the values we get,

$Bond Price=50*\left ( \frac{1-(1+0.06)^{-20}}{0.06}\right )+\frac{1000}{(1+0.06)^{20}}$

$Bond Price=50*\left (11.47\right )+\frac{1000}{3.21}$

$\mathbf{Bond Price= 573.50+ 354.18 = 927.80}$

4 0

2 years ago

The price of cigars is $10, with a quantity demanded of 1,000 per day. If the price increases to $12, the quantity demanded decl

saveliy_v [14]

Answer:

PED = - 1

Explanation:

The PED or price elasticity of demand measures the sensitivity of quantity demanded to changes in price level. It is calculated by taking the percentage change in quantity demanded, which results from a change in price level, and dividing it by the percentage change in price level.

PED = percentage change in Quantity demanded / Percentage change in price

PED = [(800 - 1000) / 1000] / [(12 - 10) / 10]

PED = - 1

8 0

2 years ago

Following a self improvement plan takes a lot of discipline.<br> a. True<br> b. False

BARSIC [14]

The correct answer is B). True , this is true because trying to train yourself to do something is very hard , this is a fact because we all have something that distracts us believe it or not.

Planning to self improve your actions or thinking can be quite tricky due to daily habits and hobbies.

I hope this helps you.

8 0

2 years ago

Read 2 more answers

Which of the following situations would be most likely to lead to an increase in interest rates in the economy?

sveticcg [70]

Answer:

The correct answer is E

Explanation:

The interest rate is defined as the rate of percentage which is charged on the loan or which is paid on the savings. It is the reward for lending as well as the cost of borrowing.

When the interest rate rises or increases, then everyone tend to borrow more amount of money and the high demand of the credit states that the people are willing to pay more for the same.

So, the situation which would increase the interest rate in the economy is when the corporations set up for the expansion plans and increase the demand for the capital.

3 0

2 years ago

45 points, please help.

kipiarov [429]

The total of the assets in a balance sheet is equal to the summation of the owners' equity capital and the total liabilities of the firm.

<h3>What is a balance sheet?</h3>

Balance sheet is the financial statement of an organization that gives the details about the financial position of the company at the end of the financial period.

In the above case, the total of the assets is $50000 and the total of the equities and liabilities tallies the amount of assets. An image for the same has been attached for better reference.

Thus, the equation of the balance sheet holds true in the case of ABC Rentals.

Learn more about balance sheet here:

brainly.com/question/26323001

#SPJ1

3 0

1 year ago