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KatRina [158]
3 years ago
5

You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 8.2 percent to 7.7 percent,

the fair present value rose from $950 to $970. The bond pays interest annually. What is the duration of this bond? Assume annual payments.
Business
1 answer:
Alborosie3 years ago
6 0

Answer:

4.5 years

Explanation:

the change in price = $970 - $950 = $20

the change in rate of return = 7.7% - 8.2% = -0.5% or -0.005

to determine the duration of the bond we can use the following formula:

duration = (Δ price / price) / [Δ rate / ( 1 + rate)]

= ($20 / $970) / [-0.005 / ( 1 + 0.077)] = 0.0206 / (-0.0046) = -4.48 years ≈ 4.5 years (remaining time is positive)

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1.Why is GDP / Capita a more accurate way of determining the well-being of a people?
Vesnalui [34]

Answer:

1. GDP is an indicator of a society's standard of living, but it is only a rough indicator because it does not directly account for leisure, environmental quality, levels of health and education, activities conducted outside the market, changes in inequality of income, increases in variety, increases in technology. 2. Real GDP is accurate to hundreds of dollars; nominal GDP is accurate to thousands of dollars. 3. Nominal GDP is an assessment of economic production in an economy that includes current prices in its calculation. 4. The four stages of the cycle are expansion, peak, contraction, and trough. Factors such as GDP, interest rates, total employment, and consumer spending, can help determine the current stage of the economic cycle. Insight into economic cycles can be very useful for businesses and investors.

Explanation:

I hope this can help :)

5 0
2 years ago
Florence deposited ₱ 14,800 in a bank that gives 4.35% simple interest. after 2years 4months, she went back to the bank to check
Nadusha1986 [10]

Answer:

₱ 16,300.054

Explanation:

The formula for calculating simple interest is as below.

I= p x r x t

In this case, p= 14,800, r = 4.35% and t is 2 years and 4 months

the interest rate is in years; we need to convert two years and four months to years.

=4 months = 4/12 of one year = 0.33

2 years 4 months = 2.33 year

I= 14,800 x 4.35/100 x 2.33

I= 14,800 x 0.0435 x 2.33

I=1,500.054

the amount in the bank will be principal plus interest

=14,800 + 1500

=16,300.054

5 0
3 years ago
In 2016, Amazon began charging a 5.75% sales tax on products it sells in the District of Columbia. Holding all else constant, th
PtichkaEL [24]

Answer:

b. decrease Amazon sales

Explanation:

Note: <em>"</em><em>Options the question is attached as picture below"</em>

In 2016, Amazon began charging a 5.75% sales tax on products it sells in the District of Columbia. If we hold all else equal, the effect of this tax would be <u>to decrease Amazon Sales</u> In the District of Columbia.

This action will consequentially increase the sales in local Market and then discourage online shopping along with it In Columbia district; it will decrease sales overall.

5 0
3 years ago
Winner Corporation acquired 80 percent of the common shares and 70 percent of the preferred shares of First Corporation at under
lys-0071 [83]

Answer:

b. $100,000

Explanation:

Based on the information given , the FIRST'S CONTRIBUTION TO CONSOLIDATED NET INCOME for 20X9 will be NET INCOME amount of $100,000 because During the year 20X9, the company reported NET INCOME of $100,000 in which they paid no dividends.

Therefore First's contribution to consolidated net income for 20X9 is $100,000

4 0
4 years ago
If each bank in the United States had to keep 100 percent of checkable deposits as reserves, each $1 the Federal goverment injec
madreJ [45]

Answer: money supply could increase by 100

Explanation:

Reserve requirement is a regulation by the central bank or reserve bank of a country that requires commercial banks to hold a certain percentage of funds as reserves .

When US Bank keep 100% of check able deposits as reserves that means the multiplier is 100. each $1 the federal government injects could increase the money supply by 1100

7 0
3 years ago
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