Answer and Explanation:
Please find answer and explanation attached
Answer:
The answer is $79.42
Explanation:
Zero-coupon bonds does not make any periodic payments of interest. It pays both the interest and the face value at maturity.
N(Number of periods) = 4 years
I/Y(Yield to maturity) = 5.93 percent
PV(present value or market price) = ?
PMT( coupon payment) = 0
FV( Future value or par value) = $100
We are using a Financial calculator for this.
N= 4; I/Y = 5.93; PMT = 0; FV= $100; CPT PV= -79.42
Therefore, the market price of the bond is $79.42
Answer:
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Explanation:
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A puttable bond gives the bondholder the right to cash in the bond before maturity at a specific price after a specific date.
What is meant by puttable bonds?
A puttable bond, also known as a put bond or retractable bond, is a type of bond that gives the bondholder (investor) the right but not the responsibility to demand that the issuer repay the bond before its maturity date. This bond has a put option built into it, to put it another way.
Who benefits from a puttable bond?
Bonds with put options offer excellent support for the bondholder's reinvestment risk. They have the option to repurchase the bond at any time, using the proceeds to buy high-yield bonds. However, businesses can be financed by firms without having to pay higher interest rates.
Learn more about Puttable bonds: brainly.com/question/16964019
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Answer:Substitution ---B
Explanation:
When goods are closely related together such that they both give similar purpose , they are called Substitute goods.
Therefore when any of the substitute goods prices rises, Consumers will go for the cheaper alternatives which will provide more value for thier money.
Here, the rise in the price of Pepsi caused consumers to shift to a cheaper alternative which is Coke. Other substitute goods that can have the Substitution effect include beef and chicken, butter and margarine etc
