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Alexxx [7]
3 years ago
9

Bond investors will experience capital gains when Group of answer choices market interest rates are high and falling. market int

erest rates are high and rising. the required rate of return exceeds the risk-free rate of return. more bonds are called than issued over a given period of time.
Business
1 answer:
solong [7]3 years ago
3 0

Answer:

A) market interest rates are high and falling

Explanation:

Bonds and interest rates have an indirect relationship.  When interest rates rise, bond prices tend to fall.

Bonds pay interests on a fixed rate. When market interest rates are rising, investors will prefer investing in other options due their high return as opposed to the fixed returns from bonds. Bonds become less attractive, leading to a decline in prices.

Buying Bonds when the interests are rising means buying at a cheaper rate. When interest rates start falling, bond prices will rise again due to their inverse relationship.

Capital gains occur when an investment is bought at a lower price and sold at a higher price.  Buying bonds when interests rate is high and selling when interests are low will lead to capital gains.

You might be interested in
Stores such as T. J. Maxx, Burlington Coat Factory, and Marshalls buy manufacturers' seconds, overruns, returns, and off-season
Rama09 [41]

Answer: off price retailers

Explanation:  In simple words, it refers to the retailers that sells high quality products at relatively lower prices than market. The key to their business structure is the discount they offer as the majority of product they sell are of second hand quality or are off seasoned.

    They procure material directly from the suppliers in the form of scrap etc and then sells it to retailer at heavy discounts. Hence from the above we can conclude that the correct answer is off price retailers.

4 0
3 years ago
NewKirk Inc.., is an unlevered firm with expected annual earnings before taxes of $21 million in perpetuity. The current require
IrinaVladis [17]

Answer:

$11,895,000

Explanation:

Expected annual earnings before tax = $21,000,000

Debt issue = $30,000,000

Interest rate = 9%

Annual Interest expenses = $30,000,000 × 9%

= $2,700,000

EBT = EBIT - Interest expenses

= $21,000,000 - $2,700,000

= $18,300,000

Net income = $18,300,000 × (1 - 35%)

= $11,895,000

Cash flows available to equity holders after recapitalization will be $11,895,000.

8 0
3 years ago
In 2019, Joshua gave $13,400 worth of Microsoft stock to his son. In 2020, the Microsoft shares were worth $27,000. What was the
baherus [9]

Based on the information given the gift tax in 2019 is $0.

Gift tax are tax that is imposed by the federal government on taxpayer for giving out gift.

The gift tax for 2019 is $15,000 annually which means that any taxpayer that gift someone else gift either as cash or property that is not above $15,000 will not be taxed or will not incurred any gift tax.

On the other hand any taxpayer that give out gift that is above $15,000 will  be taxed which means that the giver will have to file a tax return reason being that the gift is above the recommend yearly gift tax exclusion amount of $15,000.

Based on the given scenario the amount Joshua gave his son which is $13,400 is not above the yearly gift tax of $15,000 which means that Joshua will not  file a gift tax return.

Inconclusion the gift tax in 2019 is $0.

Learn more about gift tax here:brainly.com/question/7215286

7 0
3 years ago
Which is true about the interest on corporate bonds?
shusha [124]
Interest corporate bonds is taxed as an income tax but can also be tax as capital gain. Usually the interest itself is considered as state income tax. For gain and losses, that's the time it will gain capital gain if the if is redeemed before its maturity stage.
5 0
3 years ago
If the two countries were to specialize and trade with one another, which country would import airplanes?
tresset_1 [31]

The country that should import airplanes is country A.

<h3>Which country should import airplanes?</h3>

The country that should import airplanes is the country that does not have a comparative advantage in the production of airplanes. A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.

A country has a lower opportunity cost if it forgoes less quantity of an alternative product when producing another product.

Opportunity cost of country A in the production of airplanes: 8 million / 8 = 1 million

Opportunity cost of country B in the production of airplanes: 4 million / 6 = 670,000

To learn more about comparative advantage, please check: brainly.com/question/25139916

#SPJ1

6 0
2 years ago
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