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Vladimir [108]
3 years ago
7

Three $1,000 face value, 10-year, noncallable, bonds have the same amount of risk, hence their YTMs are equal. Bond 8 has an 8%

annual coupon, Bond 10 has a 10% annual coupon, and Bond 12 has a 12% annual coupon. Bond 10 sells at par. Assuming that interest rates remain constant for the next 10 years, which of the following statements is CORRECT?
a. Since the bonds have the same YTM, they should all have the same price, and since interestrates are not expected to change, their prices should all remain at their current levels untilmaturity.
b. Bond 12 sells at a premium (its price is greater than par), and its price is expected to increaseover the next year.
c. Bond 8 sells at a discount (its price is less than par), and its price is expected to increase overthe next year.
Business
1 answer:
Agata [3.3K]3 years ago
8 0

Answer:

step by step Explanation:

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lol... is that a question

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3 years ago
Jose owns a dog whose barking annoys Jose's neighbor Amy. Suppose that the net benefit of owning the dog is worth $400 to Jose a
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Answer: Jose has to pay $600.

Explanation:

Jose has to pay $600 to Jane for her inconvenience.

In Accordance with Coase theorem, when two conflicting parties exist, one has to ‘buy the right’ from the other party.

Which In this scenario or case, Jane has the ‘right to prevent Jose from having a dog’.

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3 years ago
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B because is B I now it is
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3 years ago
The S&amp;P 500 index delivered a return of 20%, -10%, 20%, and 5% over four successive years.
sladkih [1.3K]

Answer:

C) 8.75%

Explanation:

Number of periods = 4 years

Given return rates = 20%, -10%, 20%, and 5%

To obtain the arithmetic average annual return, add the return rates given for all periods and divide the sum by the number of periods.

AAR = \frac{20-10+ 20+ 5}{4} \\AAR=8.75\%

Over four years, the S&P 500 index delivered an arithmetic average annual return of 8.75%.

4 0
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According to the quantity theory of money, a 5 percent increase in money growth increases inflation by ___ percent. According to
lina2011 [118]

Answer:

both blanks can be filled by <u>5%</u>

Explanation:

The quantity theory of money states that there is a proportional relationship between the money supply and the general level of prices. An increase in the money supply will increase the general level of prices in the same proportion (called inflation).

The Fisher equation measures the relationship between nominal and real interest rates. Real interest rate = nominal interest rate - inflation rate.

So if inflation increases, the nominal inflation rate will increase to keep the real interest rate the same.

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