Answer:
The answer is option D
Explanation:
The bond can be issued at par, at a discount or at a premium depending on the coupon rate and the market interest. The price of the bond which pays semi annual coupon can be calculated using the formula of bond price. The formula to calculate the price of the bond is attached.
First we need to determine the semi annual coupon payment, periods and YTM.
Semi annual coupon payments = 2000000 * 0.1 * 6/12 = 100000
Semi annual periods = 5 * 2 = 10
Semi annual YTM = 0.08 * 6/12 = 0.04
Bond Price = 100000 * [(1 - (1+0.04)^-10) / 0.04] + 2000000 / (1+0.04)^10
Bond Price = $2162217.916
The price of the bond is thus $2162290 approx. The difference in answers is due to rounding off.
Answer:
The last option is the answer -$141.80
Explanation:
we will use the present value formula for Trish she gets paid every first day of the month therefore she will receive an immediate payment of cash flow which will be added to the present value of future periodic value. Therefore we will find the difference between present values for Trish and Josh which have the same amounts which they'll receive per month.
Given: Trish and josh both receive $450 per month therefore that will be C the monthly future payment that will be received.
They will receive these amounts in a course period of Four years so that will be n = 4 x12=48 because we know that they will receive these payments every month or on a monthly basis for four years. which n represent periodic payments.
i which is the discount rate of 9.5%/12 as we know they will recieve these amounts monthly.
Therefore using the following formulas for present value annuity:
Pv = C[(1-(1+i)^-n)/i] and Pv= C[(1-(1+i)^-n)/i](1+i) then get the difference between these two present values for Trish and Josh.
therefore we will substitute the above values on the above mentioned formula to get the difference:
Pv= 450[(1-(1+9.5%/12)^-48)/(9.5%/12)] - 450[(1-(1+9.5%/12)^-48)/(9.5%/12)](1+9.5%/12) then we compute and get
Pv= $17911.77614 - $18053.5777
Pv = -$141.80 is the difference between the two sets of present values as one has an immediate payment and one doesn't have it.
Answer:
D. Market supply and market demand determine the price and quantity bought and sold in the market.
Explanation:
In perfectly competitive market, equilibrium price and quantity is determined at the point where the aggregate supply curve and aggregate demand curve intersect.
If either supply or demand changes, the supply/demand curve will shift to intersect the demand/supply curve at a new equilibrium point.
In other words, although both suppliers and buyers are price-takers they both influence price and quantity bought and sold,<em> at the aggregate level</em>.
Answer:
GDP = 280 billion
Net investment = 10 billion
National income = 270 billion
Explanation:
given data
Consumption = 200
Depreciation = 20
Retained earnings = 12
Gross investment = 30
Imports = 50
Exports = 40
Net foreign factor income = 10
Government purchases = 60
solution
we get here GDP that is express as
GDP = Consumption + Gross investment + Government purchases + Net exports ...................1
Net exports = ( Exports - Imports)
so put here value
GDP = 200 + 30 + 60 + 40 - 50
GDP = 280 billion
and
Net investment will be as
Net investment = Gross investment - Depreciation ...............2
Net investment = 30 -20
Net investment = 10 billion
and
National income = GDP - Depreciation + Net foreign factor income ............3
National income = 280 - 20 + 10
National income = 270 billion
