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2 years ago

The market interest rate related to a bond is also called the

Business

1 answer:

salantis [7]2 years ago

5 0

Answer:

effective interest rate

Explanation:

The effective interest rate is the rate that an investor actually earns from investing in a bond. The effective interest rate is usually different than the interest rate stated on a bond (e.g. coupon rate).

It is also called market interest rate because bonds are sold in secondary markets at a different price than face value (usually bonds are sold at a premium or at a discount). That price at which the bonds are sold determine if the effective interest rate will be higher or lower than the stated interest rate of the bond.

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When her income increased from $10,000 to $20,000, Heather's consumption of macaroni decreased from 10 pounds to 5 pounds and he

maks197457 [2]

Answer:

This statement is true.

Explanation:

The concept of income elasticity measures a change in the demand because of change in the income of the consumer.

It is calculated as the ratio of change in demand to change in income.

A person was earning $10,000. Her income increased to $20,000.

Her consumption of macaroni decreased from 10 pounds to 5 pounds.

While her consumption of soy-burgers increased from 2 pounds to 4 pounds.

Income elasticity for macaroni

= $\frac{\% \Delta Q}{\% \Delta Y}$

= $\frac{\frac{5-10}{5} }{\frac{20,000 -10,000}{10,000} }$

= $\frac{\frac{-5}{5} }{\frac{10,000}{10,000} }$

= $\frac{-1}{1}$

= -1

Income elasticity for soy-burgers

= $\frac{\% \Delta Q}{\% \Delta Y}$

= $\frac{\frac{4-2}{2} }{\frac{20,000 -10,000}{10,000} }$

= $\frac{\frac{2}{2} }{\frac{10,000}{10,000} }$

= 1

So, we see that macaroni has a negative income elasticity, its demand decreases with increase in income. Macaroni is an inferior good.

Soy-burgers sow a positive income elasticity. Their demand increases with increase in income. They are normal goods.

8 0

3 years ago

On January 1, 2021, Bishop Company issued 6% bonds dated January 1, 2021, with a face amount of $33 million. The bonds mature in

Allisa [31]

Answer:

a. Determine the price of the bonds at January 1, 2021.

market price:

PV of face value = $33,000,000 / 1.04²⁰ = $15,060,769

PV of coupon payments = $990,000 x 13.590 (PV annuity factor, 4%, 20 periods) = $13,454,100

market price = $28,514,869

b. Prepare the journal entry to record the bond issuance by Bishop on January 1, 2021.

Dr Cash 28,514,869

Dr Discount on bonds payable 4,485,131

Cr Bonds payable 33,000,000

c. Prepare the journal entry to record interest on June 30, 2021, using the effective interest method.

amortization of bond discount = ($28,514,869 x 4%) - $990,000 = $150,595

Dr Interest expense 1,140,595

Cr Cash 990,000

Cr Discount on bonds payable 150,595

d. Prepare the journal entry to record interest on December 31, 2021, using the effective interest method.

amortization of bond discount = ($28,665,464 x 4%) - $990,000 = $156,619

Dr Interest expense 1,146,619

Cr Cash 990,000

Cr Discount on bonds payable 156,619

4 0

3 years ago

HELP HELP HELP 10 POINTS HURRY ASP AHHH

Nonamiya [84]

1 - Point-of-Sale Display
2 - Sampling
3 - In-Store Promotion
4 - Event Marketing

7 0

3 years ago

Your friend is worried about saving enough money for college and wants to research different situations. What would you advise h

natima [27]

Answer:

I would reccomend finding a site like, "How to save money for college" or something.

Explanation:

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2 years ago

Which of the following statements is false regarding the risk assessment component of internal control? a. Risk assessment inclu

natali 33 [55]

Answer:

Economic changes would not be considered a risk that needs to be analyzed as part of the risk assessment process.

Explanation:

Risk assessment is the process of identifying events that could potentially cause harm, to an individual, business or the environment and analysing them to get an acceptable tolerance level.

Risk assessment determines the likelihood of an event happening, it's impact, and tolerability the entity can take.

The environment is a major consideration of risk assessment, as risk is always inherent as business interacts with its environment.

7 0

2 years ago