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Viefleur [7K]
3 years ago
12

Which of the following statements is CORRECT? a. Long-term bonds have less price risk but more reinvestment risk than short-term

bonds. b. Relative to a coupon-bearing bond with the same maturity, a zero coupon bond has more price risk but less reinvestment risk. c. If interest rates increase, all bond prices will increase, but the increase will be greater for bonds that have less price risk. d. Long-term bonds have less price risk and also less reinvestment risk than short-term bonds. e. One advantage of a zero coupon Treasury bond is that no one who owns the bond has to pay any taxes on it until it matures or is sold.
Business
1 answer:
djverab [1.8K]3 years ago
5 0

Answer:

B) Relative to a coupon-bearing bond with the same maturity, a zero coupon bond has more price risk but less reinvestment risk.

Explanation:

Price risk refers to the risk associated with changing bond prices as the interest rates fluctuate. Higher interest rates = lower bond prices.

Reinvestment risk refers to the risk that the cash flows generated by bonds fluctuates due to changes in the interest rates. For example, if the interest rate decreases, the investor will not be able to reinvest the proceeds from the coupons at the same interest rate than the bond itself.

A zero coupon bond practically eliminates reinvestment risk, but is very sensitive to price risk.

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Answer:

Conceptual

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Conceptual decision making is based on creative thinking and the leader is not afraid to take risks and take the visionary approach to solve his/her problems. In the given scenario, Marie is a risk taker and consider her alternatives taking into account the broader perspective and future possibilities. She is more achievement oriented than finding immediate short term solutions.

7 0
3 years ago
TRUE or FALSE. There are two means for achieving financial goals—you either need to increase your savings or reduce spending.
quester [9]
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3 years ago
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If you expect a stock be priced at $80 in one year and pay a dividend of $1.85, what is the most you would be willing to pay for
ElenaW [278]

Willing to pay for the stock today is  $72.43.

Given values, Dividend = $1.85

                      Price = $80

                      return = 0.13

Formula, Current Price = (Dividend + Price ) / (1 + return )

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The number one purpose that buyers personal inventory is to earn a return on their funding. That go back commonly is available in  viable methods: The stock's price appreciates, this means that it is going up. you can then promote the stock for a profit if you'd like.

The very best way to shop for stocks is thru a web stockbroker. After beginning and funding your account, you may buy shares via the broker's internet site in a remember of minutes. Other options encompass the use of a full-provider stockbroker, or shopping for inventory directly from the company.

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2 years ago
In two or more complete sentences, compare and contrast the 401(k) and the 403(b) savings plans.
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4 years ago
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Type the correct answer in the box. Spell all words correctly.
ra1l [238]

Answer:

The answer is Monopoly

Explanation:

Monopoly describes the situation which supply of a service or commodity is controlled by a specific enterprise or person. The situation gives rise to what is known as a mopolisitic market structure.

A monopolistic market, like the term implies, describes a market that is dominated by just one company. In other words, it is just a single company that offers services and products to the public.

Being the only supplier, the company can raise prices, restrict output and enjoy super-normal profits.

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