Answer:
The market price of this bond is: $1,069.8.
Explanation:
To calculate the market price of the bond, we have to use the following formula:
Bond Price= C*((1-(1+r)^-n)/r)+(F/(1+r)^n)
C= periodic coupon payments: $1,000*7%= $70
F= Face value: $1,000
r= Yield to maturity: 5.85%
n= No. of periods until maturity: 8 years
Bond Price= 70*((1-(1+0.0585)^-8)/0.0585)+(1,000/(1+0.0585)^8)
Bond Price= 70*((1-0.635)/0.0585)+(1,000/1.58)
Bond Price= 70*6.24+633
Bond Price= 436.8+633
Bond Price= 1,069.8
Answer:
Current ration is a measurement that measures how many current assets are there to cover up the current liabilities. the ratio represent the firm's ability to meet the day to day, short term obligations.
it is calculated as follows,
Quick Ratio/Current asset ratio=Current Assets/Current Liabilities
a normal, health current asset ratio is 1. and it is better when the number is going up.
This gives the short term lenders (such as short term bond holders) and suppliers the ability to assess the companies ability to pay off the short term obligations in an even of bankruptcy or finanacial crisis.
Explanation:
<u>The substitution bias causes an inflation rate calculated using a fixed basket of goods over time to overstate the true rise in the cost of living because it does not take into account that people can substitute away from goods whose prices rise disproportionately.</u>
Explanation:
<u>When the price of a good rises, consumers tend to purchase less of it and to seek out substitutes instead</u>.
<u>On the other hand , if the price of a good falls, people will tend to purchase more of it and not opt for its substitutes</u>
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This concept implies that goods with generally rising prices should tend over time to become less important in the overall basket of goods used to calculate inflation, while goods with falling prices should tend to become more important for the calculation of inflation
The <u>quality/new goods bias</u> causes inflation calculated using a fixed basket of goods over time to overstate the true rise in cost of living <u>because improvements in the quality of existing goods and the invention of new goods are not taken into account.
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The fundamental philosophy behind Everyday Low Pricing exists to decrease investment in promotion and transfer part of the savings to lower price.
<h3>What is Everyday Low Pricing?</h3>
Everyday Low Price (EDLP) is a pricing technique employed by merchants that guarantees customers the lowest prices in-store without the need to apply a coupon, wait for a sales event, or take any other steps to obtain an acceptable price on the goods they purchase. There are numerous companies that use an everyday low pricing strategy, including Wal-Mart, Amazon, Procter & Gamble, Winn-Dixie, and Trade Joe's. A survey indicates that 26% of American retailers use EDLP and 74% use high-low promotions.
You can reduce demand swings, prevent sales promotions, and improve your demand forecasting processes by using an everyday low pricing strategy. You can lower the price of your products using a cheap pricing plan to draw in more customers and boost sales.
Hence, The fundamental philosophy behind Everyday Low Pricing exists to decrease investment in promotion and transfer part of the savings to lower price.
To learn more about Everyday Low Pricing refer to:
brainly.com/question/13055094
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