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NARA [144]
4 years ago
9

An investor holds two bonds, one with 5 years until maturity and the other with 20 years until maturity. Which of the following

is more likely if interest rates suddenly increase by 2%? 1)The 5-year bond will decrease more in price. 2)The 20-year bond will decrease more in price. 3)Both bonds will decrease in price similarly. 4)Neither bond will decrease in price, but yields will increase. please explain
Business
1 answer:
cricket20 [7]4 years ago
4 0

Answer:

2) The 20 year bond will decrease more in price

Explanation:

Bonds represent debt securities whereby the issuer raises long term finance, with an obligation to pay a fixed rate of coupon payments to the lender and principal repayment upon maturity.

Bond prices refer to the present value of a bond's stream of coupon payments and principal repayment at the end.

The market rate of interest represents an investors required rate of return also known as yield to maturity (YTM).

Bond prices and interest rates have inverse relationship. When market interest rates increase, the price of bonds fall.

In the given case, the fall in the value would be more in case of 20 year old bond since the interest rate pattern is more certain in shorter duration than for longer duration.

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Lexie, a marketing manager, regularly interviews candidates for her team. Because Lexie is a
bogdanovich [222]

Lexie's interviews are not as effective because she does not care about the professional training of the people she will hire, which can have serious consequences on the operation of the company. On the other hand, the referral system would also hinder the operation of the company because the skills or abilities of the employees are not verified.

When we do a recruitment process, we must have several aspects in common to hire or dismiss a job applicant. Among the aspects that must be taken into account are:

  • Work experience.
  • Vocational training.
  • Other experiences.

Following the foregoing, the person in charge of the selection process must objectively select the candidate who best fits a job based on her experience or professional training.

According to the above, Lexie is limiting her liability because she only looks at aspects of the applicants' personal lives without evaluating their ability to perform a job. Additionally, you should carry out some tests on the applicants to verify their work capabilities.

On the other hand, in the referral system, she has several limitations because she accepts the criteria of another individual or organization to hire a person without herself evaluating him to fit the job that she requires.

Learn more about teamwork in: brainly.com/question/18869410

3 0
2 years ago
The step of making a tentative plan in the troop-leading procedure usually has six steps. what is step six?
vladimir1956 [14]
Step six is to complete the plan.

The basic six steps are:
- receiving the requirements
- issuing a warning order
- making the tentative plan
- initiating the movement
- conducting the <span>reconnaissance, and finally
</span>- completing the plan

It is also advisable to follow the 6 steps by two additional steps which are:
- issuing the complete order
- supervision
5 0
3 years ago
Name two books of prime entry that are also books of double entry? ​
aev [14]
A book or record in which certain types of transaction are recorded before becoming part of the double-entry book-keeping system. The most common books of prime entry are the day book, the cash book, and the journal
3 0
3 years ago
All the following were true of the American economy under Cotton Kingdom EXCEPT a the South reaped all the profits from the cott
Lubov Fominskaja [6]

Answer:

a) the South reaped all the profits from the cotton trade.

Explanation:

Cotton grown in the southern states of the US helped to start the industrial revolution in the United Kingdom and northern states in the US. Even though cotton was not grown in northern states, the factories that processed cotton were located there. The south provided the raw materials and the north provided the final processed goods.

4 0
3 years ago
Lang Warehouses borrowed $196,401 from a bank and signed a note requiring 7 annual payments of $33,942 beginning one year from t
Snezhnost [94]

Answer:

5%

Explanation:

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

The interest rate implicit in the agreement can be determined by finding the internal rate of return.

Cash flow in year 0 =  $-196,401

Cash flow each year from year 1 to 7 = $33,942

IRR = 5%

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

5 0
3 years ago
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