1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
AleksandrR [38]
3 years ago
14

risk is the risk of a decline in a bond's value due to an increase in interest rates. This risk is higher on bonds that have lon

g maturities than on bonds that will mature in the near future. risk is the risk that a decline in interest rates will lead to a decline in income from a bond portfolio. This risk is obviously high on callable bonds. It is also high on short-term bonds because the shorter the bond's maturity, the fewer the years before the relatively high old-coupon bonds will be replaced with new low-coupon issues. Which type of risk is more relevant to an investor depends on the investor's , which is the period of time an investor plans to hold a particular investment.
Business
1 answer:
Ilya [14]3 years ago
8 0

Answer:

Price Risk, Reinvestment Risk, Investment Horizon and Longer maturity Bond.

Explanation:

  • Price risk is the risk of a decline in a bond's value due to an increase in interest rates. This risk is higher on bonds that have long maturities than on bonds that will mature in the near future.
  • Reinvestment risk is the risk that a decline in interest rates will lead to a decline in income from a bond portfolio. This risk is obviously high on callable bonds. It is also high on short-term bonds because the shorter the bond's maturity, the fewer the years before the relatively high old-coupon bonds will be replaced with new low-coupon issues.
  • Which type of risk is more relevant to an investor depends on the investor's investment horizon, which is the period of time an investor plans to hold a particular investment.
  • Longer maturity bonds have high price risk but low reinvestment risk, while higher coupon bonds have a higher level of reinvestment risk and a lower level of price risk.
You might be interested in
You owe $6,800 on a car loan that has an interest rate of 6.75 percent and monthly payments of $310. You lost your job and your
solmaris [256]

Answer:

<em>It will take 9 months longer to repay this loan</em>

Explanation:

<u>Financial Loan Payments</u>

Let's assume a loan has been received for a present value PV at an interest rate i during n periods. Being R the amount of each payment, then

\displaystyle PV=R\cdot \frac{1-(1+i)^{-n}}{i}

Solving for n we have

\displaystyle n=-\frac{log\left(1-PV.i/R\right )}{log(1+i)}

The first agreement of payment has the following data

PV=6,800

i=6.75/(12\cdot 100)=0.005625

R=310

Computing n

\displaystyle n=-\frac{log\left(1-6,800\cdot 0.005625/310\right )}{log(1+0.005625)}

n=23.5\approx 24\ months

The new agreement changes R to 225, thus

\displaystyle n=-\frac{log\left(1-6,800\cdot 0.005625/225\right )}{log(1+0.005625)}

n=33.2\approx 33\ months

This means that it will take 9 months longer to repay this loan

8 0
3 years ago
Assume that a U.S. firm considers investing in British one-year Treasury securities. The interest rate on these securities is 12
MArishka [77]

Answer:

equal to the british interest rate

Explanation:

Data provided in the question

The Interest rate on these securities = 12%

In the U.S, the interest rate = 10%

Also the spot rate for today would become suitable for the spot rate

Based on the above information, the effective yield on the british securities would be equivalent to the british interest rate and hence the same is to be considered

7 0
3 years ago
Tonya's company set up a booth at the college job fair to identify spring graduates who might be candidates for employment. This
Lerok [7]

Tonya's company set up a booth at the college job fair to identify spring graduates who might be candidates for employment. This is an example of recruiting.

  • Give candidates a chance to interact directly with the employer. Give a company the chance to evaluate the skills of a possible employee.
  • All businesses must generally decide on three aspects of hiring: personnel policy, sources of hiring, and the traits and conduct of the recruiter.
  • To assist your company in gaining a competitive edge through enhanced productivity, performance, and efficiency.

Employees' knowledge and abilities should be improved for their existing roles-

  • Professional education
  • Mentoring and coaching.
  • Cross-disciplinary instruction.
  • Creation of "soft skills"
  • Personal advancement

Learn more about recruiting brainly.com/question/13622355

#SPJ4

4 0
2 years ago
What responsibilities does the team leader have in a collaborative project such as designing a formal report
rodikova [14]

Answer and explanation:

Leaders are always the ones who direct teams into achieving the collective goals the group has set. On writing a formal report, the leader must identify the members capable of gathering precise data that will support the report ideas. After that information is collected, the first draft must be written with the conclusions all the team members came up with. Then, the final report must be elaborated with the approval of most parts of the team to finally handle the report to the leader so he or she can present it.

6 0
3 years ago
Read 2 more answers
Which of the following is the one key interest rate to focus on when trying to forecast interest rate trends in the future?
Deffense [45]

Answer:

d. Federal funds rate

Explanation:

The federal fund rate is considered risk-free hence, they will always be paid in time for the full amount. It is the basis for all the calculation to get the other rates in the markets.If the FED increases or decreases the federal fund rate then, all the others will change accordingly.

IE: a change in the FED rate will change the CAMP of all companies and thus, changing the WACC as well

7 0
3 years ago
Other questions:
  • A company has a new concept for a lightweight electric scooter that can be easily folded and taken with you inside a building or
    8·2 answers
  • In which economic system does the government own most of the factories, equipment, and agricultural lands?
    10·1 answer
  • A​ monopolist's maximized rate of economic profits is ​$2 comma 700 per week. Its weekly output is 900 ​units, and at this outpu
    7·1 answer
  • Why might vertical systems be a business ethics issue? ?
    11·1 answer
  • "Suppose that the demand and supply curves have similar steepness. If demand for the good increases slightly and at the same tim
    10·1 answer
  • If the price elasticity of supply is 0.5 and the quantity supplied decreases by 6%, then the price must have decreased by 3%. a.
    5·1 answer
  • Face when buying one of your favorite foods.
    13·1 answer
  • ABC purchased equipment for $60,000 on January 1, 2018. The equipment is expected to have a five-year life, with a residual valu
    5·1 answer
  • A unit volume objectives for pricing should be used judiciously because higher volume goals can sometimes result in Blank______.
    10·1 answer
  • A record of payroll infornation including computation of gross and net pay, for each employee for the pay period is called a:___
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!