The statement, investor perception on the risk of bonds will raise their desired return is true.
The higher an investment's risk, the greater its potential returns should be. By contrast, a very safe and low-risk investment should generally offer low returns. So, this investor perception will raise the desired return of the risk of bonds.
Generally, the higher the potential return of an investment, the higher the risk. Thus, there is no guarantee that you will actually get a higher return by accepting more risk. In this matter diversification is useful.
Hence, you can minimize the risk by making sure the company's bond you own is not a high risk company with a high probability of paying back.
To learn more about risk of bonds here:
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Answer:
I will take $36,230.5 to pay for the education of child.
Explanation:
Cash Invested in the saving account will earn a return of 8% each year and this amount could be withdrawn by the me to pay for the education of child.
We will use following formula to calculate the annual payments
P = r ( PV ) / [ 1 - ( 1+ r )^-n ]
where
PV = amount of investment = $120,000
r = rate of return = 8%
n = number of period = 4 years
P = 8% ( 120,000 ) / [ 1 - ( 1 + 0.08 )^-4 ]
P = 36,230.5
A market
share objective is the reason they encountered losses. Market share often pursues by companies when industry sales are relatively
flat or declining. Although increased market share is a primary goal of some
firms, others see it as a means to other ends: increasing sales and profits.
Price floor.
A floor, in real life, is at the bottom, below you — this then makes sense in business to say that a ‘floor’ represents the minimum value of something — in this case the price of video games.
In real life, a ceiling is above you, indicating that it could be used as a representative of a maximum value of something, like the price of a video game.
So, if we were to say that $120 was the ‘price ceiling’ for video games, then we would basically be saying that $120 is the most a video game could cost. If we were to say that $100 was the ‘price floor’ for video games, we would be saying that $100 is the minimum value that the price of a video game could assume.
