Answer and Explanation:
Given that Bond A pays $4,000 in 14 years and Bond B pays $4,000 in 28 years, and that the interest rate is 5 percent, we see that Using the rule of 70, the value of Bond A is 70/5 = doubled after 14 years. Now if its value is 4000 in 14 years, its current value must be halved. Hence the value is 2000.
Sinilarly the value of Bond B is approximately one fourth now because it pays 4000 in 28 years. Hence its value is 4000/4 = 1000.
Now suppose the interest rate increases to 10 percent. Hence the doubling time is 70/10 = 7 years
Using the rule of 70, the value of Bond A is now approximately 1,000 and the value of Bond B is 250
Comparing each bond’s value at 5 percent versus 10 percent, Bond A’s value decreases by a smaller percentage than Bond B’s value.
The value of a bond falls when the interest rate increases, and bonds with a longer time to maturity are more sensitive to changes in the interest rate.
The inverse relationship between price and quantity demanded can be graphically illustrated by <u>a downward sloping curve.</u> Therefore, Option D is the correct statement.
<u />
<h3>What is the relationship between price and quantity?</h3>
<u />
The law of supply and demand is a keystone of present-day economics. According to this theory, the price of a good is inversely associated with the quantity offered.
This makes the experience for plenty of goods because the more high-priced it becomes, much fewer people could be capable of affording it and the demand will finally drop.
Therefore, The inverse relationship between price and quantity demanded can be graphically illustrated by <u>a downward sloping curve.</u> Option D is the correct statement.
learn more about law of demand:
brainly.com/question/10782448
#SPJ1
Answer:
The amount of cash provided by financing activities during the year is $545,000
Explanation:
Cash flow from financing activities is the cash inflows and outflows related to the fund of the business.
Cash Flow from financing activities
Inflows
Sold common stock $560,000
Sold preferred stock <u>$56,000 </u>
Total Cash inflows $616,000
Outflows
Company purchased treasury stock $47,000
Paid dividends on common and preferred stock <u>$24,000 </u>
Total Cash inflows <u>($71,000)</u>
Net Cash flows <u>$545,000</u>
To determine the total amount that Mr. Elliot will have to pay for the purchased candy from the candy store, all that needs to be done is to multiply the weight of the candy in pounds by the price per pound. That is,
total cost = (4.50 lbs)($4.47/lb)
total cost = $20.115
If we are to round the answer to the nearest cent, it would be $20.2
Thus, the answer is $20.2.
Answer:
The Ricardian Model as described by David Ricardo is a model which explains trade between two countries and the products which they are most likely to export. The answer to your problem is given below.
Explanation:
(a) Calculate the autarky price of Goods in both countries: pG, and p*G.
The autarky price here means a price at which there will be no trade between the two countries:
Data:
The marginal product of labor in service industry of home country:
MPLS = 1
The marginal product of labor in goods industry of home country:
MPLG = 1
The marginal product of labor in service industry of foreign country:
MPLS* = 1/4
The marginal product of labor in goods industry of foreign country:
MPLG* = 1/2
The price of services in home country is:
Ps = $2
The price of goods in foreign country is:
Ps* = 12 Pesos
As per current exchange rate, the value of 12 Pesos is equal to $0.63.
source: https://mxn.currencyrate.today/usd/12
Thus,
Ps* = $0.63
The autarky price of goods in both countries are calculated as follows:
Ps/PG = MPLS/MPLG
2/PG = 1/1
PG = $2
And,
Ps*/PG* = MPLS*/MPLG*
0.63/PG* = (1/4)/(1/2)
PG* = $1.26
