1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
barxatty [35]
3 years ago
14

The Faulk Corp. has a bond with a coupon rate of 4 percent outstanding. The Gonas Company has a bond with a coupon rate of 10 pe

rcent outstanding. Both bonds have 12 years to maturity, make semiannual payments, and have a YTM of 7 percent. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds?
Business
1 answer:
motikmotik3 years ago
6 0

Answer:

Decrease in price of the bond by 16.01%

Explanation:

Find the price of the bond with the two different YTMs and compare the two prices;

<u>a.) at 7% YTM and semi-annual coupons</u>

N = 12*2 = 24

I/Y = 7%/2 = 3.5%

FV = 1,000 (use 1000 as FV if not given)

PMT = (4%/2)*1000 = 20

PV = $759.12

b.) <u>at 7% YTM and semi-annual coupons</u>

N  = 24

I/Y = (7%+2%)/2 = 4.5%

FV = 1,000 (use 1000 as FV if not given)

PMT = (4%/2)*1000 = 20

PV = $637.61

Percentage change in price = [($637.61 - $759.12)/$759.12] *100

Percentage change in price = -16.01%

There is a decrease in price of the bond by 16.01%

You might be interested in
What is cost Price formulas​
gavmur [86]

Answer:

Cost price formula = Cost + Profit

Explanation:

The Cost price formulas count two factors the gives price of product and services. The cost price formula has two factors cost of product and profit percentage that seller want to generate from specific product or services.

5 0
4 years ago
Is it possible to be admitted to Minnesota Bar Association without taking the test over? Have practiced law in Colorado for 0ne
Alinara [238K]
Rules for Admission to the Bar

The Rules for Admission to the Bar have been updated as of July 1, 2017. A complete listing of rules can be downloaded in PDF format. Or, browse Rules by section using the links below.

1. Purpose
2. Definitions and Due Date Provisions
3. State Board of Law Examiners
4. General Requirements for Admission
5. Standards for Admission
6. Admission by Examination
7. Admission Without Examination
8. Admission by Temporary License for Legal Services Programs
9. Admission by Temporary House Counsel License
10. Admission by House Counsel License
11. License for Foreign Legal Consultants
12. Fees
13. Immunity
14. Confidentiality and Release of Information
15. Adverse Determinations and Hearings
16. Conditional Admission
17. Appeal to the Supreme Court
18. Reapplication
19. Bar Admissions Advisory Council

6 0
3 years ago
Simon Peters, a senior manager at Celise Export Logistics, goes to France to negotiate a deal with the company's French partners
anyanavicka [17]

In this scenario, dressing formally during business meetings is probably a cultural imperative for the French

Explanation:

Cultural imperatives are traditions that you have to comply with when you want to succeed.

Relationship building is an example of a cultural imperatives .

Business understands the importance of building a relationship in many Asian countries such as China and Japan and Latin America.

Businessmen are not doing company business, they are doing business with people. It is a cultural necessity to spend time developing this relationship in these countries before you start up your business. Always underestimate your business partners ' value in building trust. It makes or breaks an agreement. Among Asian countries, another moral necessity is to make no one lose face. Never raise your voice or publicly threaten anyone. You will struggle in your company if you are ignorant of these cultural imperatives.

8 0
3 years ago
According to the long-run Phillips Curve:
Oxana [17]

Answer:

c. fiscal and monetary policies that impact aggregate demand do not impact the natural rate of unemployment.

Explanation:

Short run Philips Curve is downward sloping, due to inverse relationship between unemployment rate & inflation rate. High economic activity implies more inflation rate, less unemployment. Low economic activity implies less inflation rate, more unemployment.

However, the inverse relationship between inflation & unemployment is only in short run & not in long run. In long run, this inflation - unemployment trade off doesn't exist. So, any fiscal or monetary policy affecting aggregate demand & consecutively inflation rate, do not affect the natural rate of unemployment (combination of frictional & structural unemployment rate) in long run.

7 0
3 years ago
Plz help 25 points!!!
uysha [10]

Answer:

I thinks its b

Explanation:

8 0
3 years ago
Other questions:
  • The project involves an initial investment of $100,000 in equipment that falls in the 3-year MACRS class and has an estimated sa
    13·1 answer
  • The company pays cash for a piece of equipment. the list price was $9,100, but after negotiation, the final purchase price was $
    13·1 answer
  • What is the purpose of NCUA Lending Regulations? A. to educate consumers on their rights for fair credit reporting B. to educate
    8·2 answers
  • Jill is starting a fast food delivery company. she has designed a logo and plans to print flyers to advertise her services. jill
    8·1 answer
  • Adams Pointers Corporation expects to begin operations on January 1, 2019; it will operate as a specialty sales company that sel
    7·1 answer
  • How should a destroyed check by recorded in a check register?
    10·1 answer
  • 1. Which item is considered a retail product?
    7·1 answer
  • What is one consequence of stagflation?
    8·1 answer
  • When 100% peak effort from the most skilled and efficient workers is assumed, the direct labor hours required per unit is being
    7·1 answer
  • e-business is the exchange of goods and services among individuals, typically facilitated by a third party.
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!