Answer:
C- The term structure of interest rates and the time to maturity are always directly related
Explanation:
The term structure of interest rates represents the relationship that exist between interest rates and different terms (maturities). When it is graphed, the term structure receive the name of "yield curve".
Generally, yields increase at the same time maturity does it, this create an upward-sloping yield curve or a normal yield curve. But occasionally, long term yield can fall below short term yields, and this create an inverted yield curve that is regarded as it a recession is likely occurring or approaching.
Joe will likely attribute his failure to luck because he has
reasoned out that the reason why he failed the math test was because of
external locus of control in which is considered to be unstable in nature,
making his attribute fall in luck.
Honesty , Trustworthy , Determined & Passionate .
Answer: B) A loss of $200,000 on its income statement in the year the bonds are called.
Explanation:
The bonds were issued at Par. This means they were issued at 100 of par.
The bonds are now trading at 104 of par.
If Sand Inc calls the bonds then they will make a profit (loss) of,
= 5,000,000 * 104/100
= $5,200,000
Therefore their Profit (loss) will be the bond at par minus the Calling price
= 5,000,000 - 5,200,000
= -$200,000
That means they make a loss of $200,000 in the year the bonds are called.
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