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arsen [322]
3 years ago
9

A(n) bond is a long-term contract under which a borrower agrees to make payments of interest and principal, on specific dates, t

o the holder of bond. There are four main types reflecting who the issuers are: ?-Select-1.Business2.Treasury?corporate, municipal, and foreign. Each type differs with respect to degree of risk and expected return. All have some common characteristics even though they may have different contractual features.
2. The par value of a bond is its stated face value or maturity value, and its coupon interest rate is the stated annual interest rate on the bond. The maturity date is the date on which the par value must be repaid. A call provision gives the issuing corporation the right to redeem the bonds under specified terms prior to their normal maturity date, although not all bonds have this provision. Some bonds have sinking fund call provisions which require the corporation to systematically retire a portion of the bond issue each year. Because sinking fund provisions facilitate their orderly retirement, bonds with these provisions are regarded as being safer so they will have (-Select-1.lower2.equivalent )coupon rates than otherwise similar bonds without these provisions.

3. Longer maturity bonds have high-interest rate risk but low reinvestment rate risk, while higher coupon bonds have a higher level of (-Select-1.reinvestment rate 2.exchange rate)risk and a lower level of (-Select-1.interest rate2.exchange rate) risk. To account for the effects related to both a bond's maturity and coupon, many analysts focus on a measure called duration which is the bond's sensitivity to interest rates.
Business
2 answers:
Brums [2.3K]3 years ago
8 0

Answer:

1) Bond

Treasury

Risk

2) Par

Call

Sinking fund

Safer

Lower

Explanation:

Vesna [10]3 years ago
3 0

Answer:

1) treasury, corporate, municpal 2) equivalent 3) reinvestment rate, interest rate

Explanation:

1) there are four main types of bonds: treasury, corporate, municpal and zero-coupon. Foreign bonds my fall into any of these category.

2) Sinking fund provisions require a bond issuer to put aside some money regularly to be paid to bond holder at bond maturity. The insurance provided by sinking funds allows for lower interest rates. Interest expenses reduce. This deosn't mean coupon rate of bonds will change.

3) higher coupon bonds have higher reinvestment risk because a high amount has to be reinvested to get required yeild-to-maturity. They have lower level of interest rate risk. This is because if the market interest rate rises, their coupon rate will not fall as much as that of lower coupon bond

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When you take a multiple-choice test, you are relying on ________, a means of retrieving information out of your long-term memor
Colt1911 [192]

The answer is recognition.

<span>Recognition is one of the three processes of memory, the other two are encoding and storage. Recognition is the process of retrieving information from the past to use it in an actual situation.</span>

3 0
3 years ago
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Incremental Analysis for Discontinuation Decision Total Contribution margin lost if special oats is discontinued Less: Fixed cos
Scilla [17]

Incremental Analysis for Discontinuation Decision can have two way affect to the Business

Explanation:

1. Contribution Margin Lost- If the special eats is discontinued then obviously it would affect (decrease) the profit margin that the Business would be enjoying before the product discontinues

Less:

2. Fixed Cost Saving - This would generally increase as the expenditure of the organisation would decrease.

Depending upon how the product performed the company can be benefited as well as incur loos at the same time .Discontinuation of a product is generally done when the company is facing losses.

6 0
3 years ago
Sue plans to mix peppermints worth $1.20 per lb with chocolates worth $2.40 per lb to get a 40 lb mix that is worth $1.65 per lb
Lunna [17]

Answer:

Each should be used as follows:

Weight of peppermints = X = 25 lb

Weight of Chocolates = Y = 15 lb

Explanation:

Suppose

Weight of peppermints = X

Weight of Chocolates = Y

So According to given condition

X + Y = 40 (Eq. 1)

1.2X + 2.4Y = 1.65*40

1.2X + 2.4Y = 66 (Eq. 2)

By multiplying  (Eq. 1) with 1.2 we get

1.2X + 1.2Y = 48  (Eq. 3)

Now by subtracting  (Eq. 2) from  (Eq. 3)

(1.2X + 1.2Y) - (1.2X + 2.4Y) = 48 - 66

1.2X + 1.2Y - 1.2X - 2.4Y = -18

1.2X - 1.2X + 1.2Y - 2.4Y = -18 (Rearrange)

-1.2Y = -18

1.2Y = 18

Y = 18/1.2

Y = 15

By placing value of Y in (Eq. 1)

X + 15 = 40

X = 40 - 15

X = 25

<u>Check</u>

1.2X + 2.4Y = 66

1.2 (25) + 2.4 (15) = 66

66 = 66

6 0
3 years ago
Up in Smoke Tobacco Shops' bond carries a 9 percent coupon, pays interest semiannually, and has 10 years to maturity. What is th
lara [203]

Answer:

10%

Explanation:

Since the bond is selling at a discount, it means that the coupon rate is blow the market rate, so the actual rate must be higher. Since there is only one option with an interest rate above 9%, we must check to see if it works.

10% yearly interest rate = 5% semiannual interest rate

we must determine the PV of the 20 coupons paid and the face value at maturity.

to calculate the PV of the 20 coupons ($45 each) we can use an excel spreadsheet and the NPV function with a 5% discount rate: PV of the coupons = $560.80

the PV of the face value in 10 years = $1,000 / 1.05²⁰ = $376.89

the present value of the coupons and the bond at maturity = $560.80 + $376.89 = $937.69. The PV using a 5% semiannual rate is very similar to $937.75, and since the question asked us to round up to the nearest whole percent, we can assume it is correct.

6 0
3 years ago
The demand for wooden pencils is very responsive to a change in price. That is, the demand for these pencils is highly elastic.
Natalija [7]

Answer:

D. Price will rise, quantity purchased will fall, and gross revenues will fall.

Explanation:

It will lead to a higher price of the good as the management has to take into consideration the amount to wages to be paid to the workers, thus increasing the price of the goods. This will result to a lower demand at a higher price  because the price increases and competitions will take advantage of the situation and that will also reduce the revenue of the firm.

4 0
2 years ago
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