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Elanso [62]
3 years ago
6

A financial adviser has just given you the following​ advice: "Long-term bonds are a great investment because their interest rat

e is over​ 20%." Is the financial adviser necessarily​ right?
Business
2 answers:
olganol [36]3 years ago
4 0

Answer:

No

Explanation:

Determining how great an investment is dependent on more that just its interest rate. Apart from the tenor (time to maturity) and the interest rate mentioned in the question, one prominent factor to consider in determining how great a bond is is its risk.

  • Risk: irrespective of the interest rate of a bond, a riskier bond (issued by a company with a rating less than investment grade) are not considered as great an investment as sovereign bonds (issued by governments). This riskiness of a bond is usually measured by its credit rating.

As such, the financial adviser may be wrong in saying long term bonds are great because of the interest rate of 20% without considering the risk involved in investing in the bond.

Nikolay [14]3 years ago
3 0

Answer:

No

Explanation:

Long term bonds might not be great investments if the interest rate fall  or even slide into negative value in the future. This means that the bond will become insignificant in value.  

Cheers

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A discount bond is also called a ________ because the owner does not receive periodic payments.
a_sh-v [17]

A discount bond is also called a <u>zero coupon bond</u> because the owner does not receive periodic payments.

A discount bond is a bond that is issued for much less than its par—or face—fee. discount bonds can also be a bond currently trading for less than its face cost inside the secondary market. A bond is considered a deep-cut price bond if it's far bought at a substantially decrease price than the par fee, normally at 20% or more.

A zero-coupon bond is a bond that pays no interest and trades at a reduction to its face price. It is also known as a natural cut price bond or deep cut price bond. U.S. Treasury payments are an example of a 0-coupon bond.

Coupons are the promised hobby payments of a bond, paid periodically till the adulthood date of the bond. The coupon rate determines the quantity of every coupon fee of a bond. The coupon rate, expressed as an APR, is about by using the issuer and said on the bond certificate.

Learn more about discount bonds here brainly.com/question/16748047

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1 year ago
Jacob is saving up for a down payment on a car. He plans to invest $2,000 at the end of every year for 5 years. If the interest
Damm [24]

The answer would have to be B

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On January 1, 2019, Metco Inc. reported 268,000 shares of $5 par value common stock as being issued and outstanding. On March 24
elena55 [62]

Answer:

The number of shares of stock issued in the stock dividend is 5,312.20 shares.

Explanation:

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