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vfiekz [6]
2 years ago
10

When the interest rate in the economy was 10 percent, the price of a bond with no expiration date that paid a fixed annual inter

est of $500 was $5,000. If the interest rate in the economy falls to 6 percent, the price of this bond will be about
a. $4,700.
b. $5,030.
c. $7128
d. $8,333.
Business
1 answer:
Nina [5.8K]2 years ago
7 0

Answer:

Option D $8333

Explanation:

The value of the irredeemable bond can calculated using the Dividend Valuation Model.

The formula for the computation is:

Value of the Bond = Interest paid / rate of return on a similar bond

Value of the Bond = $500 / 6% = $8333.33

Note that initially the bond was worth $5000 which can be calculated with the same formula:

Value of the Bond = $500 / 10% = $5000

The net increase is $3333

So the correct answer is option D.

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Net capital outflow Select one: a. is always less than net exports. b. could be any of the above. c. is always greater than net
Leona [35]

Answer: d. is always equal to net exports.

Explanation:

The net exports of a country will always equal the net capital outflow of a country. The capital outflow of a country refers to financial assets going from a country to another country.

The reason the net exports and the capital outflows equal each other is that the financial assets will be used to pay for the imports that come into the country and the exports will represent the funds coming into the country so so the exports and imports determine the capital outflow which is why both metrics are the same.

7 0
2 years ago
Information on four investment proposals is given below: Investment Proposal A B C D Investment required $ (790,000 ) $ (120,000
goblinko [34]

Answer:

Explanation:

1. The formula to compute the profitability index is shown below:

Profitability index = Net present value ÷ investment required

For Proposal A, it would be

=  $331,300 ÷ $790,000

= 0.42

For Proposal B, it would be

=  $48,300 ÷ $120,000

= 0.40

For Proposal C, it would be

=  $62,000 ÷ $120,000

= 0.52

For Proposal D, it would be

=  $607,200 ÷ $1,820,000

= 0.33

2. The proposal rank preference is shown below:

Proposal     Profitability index    Rank

A                  0.42                         Second

B                  0.40                         Third

C                  0.52                         First

D                  0.33                          fourth

So, it would be C, A, B and D

7 0
3 years ago
In recent years, the U.S. labor market has experienced a __________ in the earnings gap between men and women. One of the main f
Leokris [45]

Answer:

In recent years, the U.S. labor market has experienced a __decline__ in the earnings gap between men and women. One of the main factors behind this is ___discrimination in labour market.___ .

Explanation:

A decline with women’s careers have been experienced with the rewards associated with or gained with top level job expertise, this has led to a discrimination in the labour market which is majorly influenced by gender. With many recruiters preferring their male counterparts for most job roles or positions.

6 0
2 years ago
Under two of the incoterms® rules, ________ has to provide the importer with a certificate of insurance.
Dovator [93]
<span>"The exporter"</span> has to provide the importer with a certificate of insurance.

The Incoterms rules are standard arrangements of exchanging terms and conditions intended to help merchants when merchandise are sold and transported. Each Incoterms rule determines: the commitments of each gathering like who is in charge of administrations, for example, transport; import and fare leeway and so on.

3 0
3 years ago
Instead of living in a service economy, we now live in a(n) ________ economy.
Nataly [62]

Instead of living in a service economy, we now live in a(n)  Mixed economy.

Explanation:

  • A mixed economy consist of  both private and government /state owned economies which  share control of owning, making, selling, and exchanging good in the country.
  • U.S. and France are two example of Mixed Economy
3 0
2 years ago
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