Answer:
A
Step-by-step explanation:
The blue graph, g(x), is shifted down 8 units.
So the answer is f(x)-8 which is A
<u>Answer:</u>
The yield to maturity of the bonds is 11%
<u>Explanation:</u>
Price at which the bonds is currently trading = 283.30$
Face Value = $1000
Coupon rate = 2%
Hence the coupon bond rate = $1000 ×2%
= ![1000\times \frac{2}{100}](https://tex.z-dn.net/?f=1000%5Ctimes%20%5Cfrac%7B2%7D%7B100%7D)
=$20
Years to maturity: 20 years
Formula used:
=![\frac{(C+ (\frac{(F-P)}{n}))}{(\frac{(F+P)}{2})}](https://tex.z-dn.net/?f=%5Cfrac%7B%28C%2B%20%28%5Cfrac%7B%28F-P%29%7D%7Bn%7D%29%29%7D%7B%28%5Cfrac%7B%28F%2BP%29%7D%7B2%7D%29%7D)
Where C is the bond coupon rate
F is the face value
P is the price
N is the number of years
=![\frac{(20 +(\frac{(1000-283.30)}{20})}{(\frac{(1000+283.30)}{2})}](https://tex.z-dn.net/?f=%5Cfrac%7B%2820%20%2B%28%5Cfrac%7B%281000-283.30%29%7D%7B20%7D%29%7D%7B%28%5Cfrac%7B%281000%2B283.30%29%7D%7B2%7D%29%7D)
=11%
The yield to maturity of the bonds is 11%