Assume the price of gasoline doubles tonight and remains at that price the next two years. The price elasticity of demand for ga
1 answer:
You might be interested in
Answer:
N = 3,120 (Approx)
Explanation:
Given:
z- score for 99% confidence = 2.58
Proportion (P) = 75% = 75 / 100 = 0.75
E = 2% = 0.02
Q = 1 - P = 1 - 0.75 = 0.25
Computation:
Therefore, N = 3,120 (Approx).
Answer:
option (C) - 6.11%
Explanation:
Data provided :
Coupon rate one year ago = 6.5% = 0.065
Semiannual coupon rate = = 0.0325
Face value = $1,000
Present market yield = 7.2% = 0.072
Semiannual Present market yield, r = = 0.036
Now,
With semiannual coupon rate bond price one year ago, C
= 0.0325 × $1,000
= $32.5
Total period in 15 years = 15 year - 1 year = 14 year
or
n = 14 × 2 = 28 semiannual periods
Therefore,
The present value =
=
or
= $32.5 × 17.4591 + $1,000 × 0.37147
= $567.42 + $371.47
= $938.89
Hence,
The percent change in bond price =
=
= - 6.11%
therefore,
the correct answer is option (C) - 6.11%