Answer:
a. Premium
b. Discount
c. Discount
Explanation:
a. Valley issued $300,000 of bonds with a stated interest rate of 7 percent. At the time of issue, the market rate of interest for similar investments was 6 percent.
Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 7% - 6% = 1% premium
Therefore, Valley's bond will sell at a premium.
b. Spring issued $220,000 of bonds with a stated interest rate of 5 percent. At the time of issue, the market rate of interest for similar investments was 6 percent.
Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 5% - 6% = -1% discount
Therefore, Spring's bond will sell at a discount.
c. River Inc. issued $150,000 of callable bonds with a stated interest rate of 5 percent. The bonds were callable at 102. At the date of issue, the market rate of interest was 6 percent for similar investments.
Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 5% - 6% = -1% discount
Therefore, River Inc.'s bond will sell at a discount.
Answer:
B. Implied warranty of fitness
Explanation:
An implied warranty of fitness for an specific purpose refers to the fact that if the seller of a product knows that the product will be used for an specific purpose and that the buyer is purchasing that product for that using it that way, then an implied warranty of fitness is formed. In this case, the seller knew that Palmer was going to carry 5,000 pounds in the truck and therefore, by offering a certain truck to Palmer, an implied warranty of fitness was formed stating that the truck could carry that load.
Answer:
The answer is "True".
Explanation:
Please find the complete question in the attached file.
It implies that its price of the bond is 101-16, which is to say
Each bond is thus stated as 
face value
That's why this statement is true.
Answer:
E(5r5) = 0.06
Explanation:
The expected rate <u><em>(which is the the projected return on a monetary investment)</em></u> on the treasury bonds at 4.05% can be calculated as seen below:
Rate on 5-year Treasury Bonds, E(r5) = 2.20%
Rate on 10-year Treasury Bonds, E(r10) = 4.05%
(1 + E(r5))^5 * (1 + E(5r5))^5 = (1 + E(r10))^10
1.0220^5 * (1 + E(5r5))^5 = 1.0405^10
1.11495 * (1 + E(5r5))^5 = 1.48738
(1 + E(5r5))^5 = 1.33403
1 + E(5r5) = 1.05933
E(5r5) = 0.05933
E(5r5) = 0.06
Answer:
D because they will feel like they are being cared about and will come back
