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otez555 [7]
3 years ago
6

The Penn Railways has a 7-year, 6.5 percent semiannual coupon bond outstanding with a $1,000 par value. The bond has a yield to

maturity of 5.5 percent. What will happen to the bond price if the market yield suddenly increases to 7 percent?
Business
1 answer:
Nuetrik [128]3 years ago
3 0

Answer:

The increase in yield to maturity from 5.5% to 7% will cause the price of the bond to fall from $ 1,057.46  to $ 972.70  

Explanation:

In order to ascertain the impact on the bond of a sudden increase in the yield to maturity from 5.5% to 7%, the present value of the bond, the current price is computed using yield of maturity of 5.5% and 7% respectively.

In calculating the present value, a discounting factor is used to state today's value of the future cash flows from the bond, given as 1/(1+r)^N, where r is the yield to maturity divided by 2 , in order to show that the bond is a semi-annual  interest paying bond.The fact that the bond is a semiannual one means interest would be paid 14 times( 7 years *2)

The present value is computed in the attached.

Download xlsx
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The Federal Reserve System Multiple Choice
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Answer: Federal reserve system is basically an independent agency.

Explanation: The Federal reserve system is the bank that functions as the central bank of the USA. It is an organization that oversees most of the economic activities of the nation, supervises the banks in the country, and help to reduce effects of financial crisis.

The federal reserve system is mainly an independent body, with it's own president and other leadership positions but it is answerable to the Congress of the USA.

4 0
2 years ago
Lee is the product manager for a software program sold by Company ABC. In evaluating the product, Lee determines that something
dezoksy [38]

Answer:

Explanation: The marketing mix consists of a number of factors that a producer usually exploits in order to influence consumers to purchase his/her products and services.

The marketing mix consists of:

- Product

- Price

- Place

- Promotion.

The above are usually called the 4Ps of marketing.

Of the four factors of the marketing mix, the factor that will the easiest for Lee to change will be the price.

This is because, often times, the price of a product or service will be the major determinant in the success of said commodity, and this is due to the fact that customers will compare the product being offered with its price in order to judge whether the product is worthy of the value placed on it.

Therefore, in order for Lee to influence the potential customers to make purchases, the price of the software program will be the easiest to be reviewed, and it should be set to a level where potential customers will be influenced to exchange their money for the software program.

8 0
3 years ago
U.S. cola companies entered the global market because of:
STatiana [176]

Answer:

C. limited growth opportunities in their domestic market.

Explanation:

U.S. cola companies entered the global market because of limited growth opportunities in their domestic market.

6 0
3 years ago
If a society wants to get the most out of the available resources, money should be spent on pollution control​ (A)​ until pollut
Ksju [112]

Answer: Option C  

           

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In the given case, we want to use the available resources at their best, therefore, the money on pollution control should be spent only until the benefit of spending one more dollar is greater than the cost of doing so.

Hence, the correct option is C.

5 0
3 years ago
Another way to achieve the same goals as minimum wage and rent control (without keeping markets from reaching equilibrium levels
LekaFEV [45]
A.) personal income
 with you using your own money nothing deducts or raises money for rent or wage.
8 0
2 years ago
Read 2 more answers
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