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Norma-Jean [14]
3 years ago
8

If the current interest rate is 5% and your semi-annual coupon paying bond has a duration of 5.33 years, how much will the price

of the bond change if the interest rate increases by 1 basis point?
Business
1 answer:
Serhud [2]3 years ago
7 0

Answer:

Percentage change in price = -5.33 * 0.00005

Explanation:

Percentage change in price = - modified duration * (Change in yield in BP/100)

Percentage change in price = -5.33 * ((0.01/2)/100)

Percentage change in price = -5.33 * (0.005/100)

Percentage change in price = -5.33 * 0.00005

You might be interested in
1. Visit a website for a company that sells products or services online. Then go to that company's
antoniya [11.8K]

Answer:

The company being examined here is Amazon.

Their corporate website is: aboutamazon.com/

while their product sales site is amazon.com

Explanation:

The various differences are:

1. the corporate is much easier on the eyes than the product sales website

2. the corporate website contains more information on the company and its corporate activities whilst the sales website is focused on the various categories of products available for sale by the company.

3. the sales website has e-commerce functionalities, the corporate does

Cheers

4 0
3 years ago
A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth.The
Tomtit [17]

Answer:

The correct answer is: neither the first nor the second would promote growth.

Explanation:

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth.The first is to increase barriers to trade.The second is to restrict foreign portfolio investment.Which of these policies would most economist think would promote growth

One of the main statistical indicators used to measure the economic evolution of a country is the Gross Domestic Product (GDP). In the macroeconomic analysis of any State, the interpretation of this value is essential to know the degree of economic development and its trends.

The weak growth of productivity in many advanced and emerging market economies after the international financial crisis is raising concerns about growth prospects. A new study indicates that reducing barriers to international trade and foreign direct investment (FDI) could stimulate productivity and output.

The entry of portfolio investment into the country is associated with the yield and risk differentials of the country abroad. This means that a change in the perception of country risk is not necessary. Rather, they need to change in relation to existing alternatives in other countries. Therefore, significant movements in this area do not necessarily reflect a change in the state of the country's economy, however, they can have important repercussions on the exchange rate and other fundamental variables of the financial markets.

7 0
3 years ago
A stock sells for $12.36 a share and has a required return of 9 percent. Dividends are paid annually and increase at a constant
jenyasd209 [6]

Answer:

$0.72

Explanation:

The computation of the amount of the last dividend paid is shown below:

Market price of a stock = Last dividend × (1 + growth rate) ÷ Required  rate of return - growth rate

$12.36 = Last dividend × ( 1 + 0.03) ÷ 0.09 - 0.03

$12.36 = Last dividend × (1.03) ÷ 0.06

$12.36 × 0.06 = 1.03 × last dividend

$0.7416 = 1.03 × last dividend

So,

last dividend is

= $0.7416 ÷ 1.03

= $0.72

7 0
3 years ago
The pricing strategy that calls for a new product being priced high to make optimum profit while there is little competition is
dalvyx [7]

The pricing strategy that calls for a new product being priced high to make optimum profit while there is little competition is called as  Skimming price strategy

Skimming Pricing, also known as price skimming, is a pricing strategy that sets the price of new products higher and lowers them when competitors enter the market. Skimming prices are the opposite of penetration prices, which set lower prices for newly launched products in order to build a large customer base from the beginning.

Skimming pricing strategy refers to setting relatively high initial prices for new products or services for early adopters who are not price sensitive when there is a strong relationship between price and perceived quality. .. Prices can go down over time.

An example of a skimming strategy can be found primarily when major technology companies such as Apple, Samsung, and Sony are developing new technologies that are known to be in high demand.

Learn more about Skimming prices here:brainly.com/question/20927491

#SPJ1

8 0
2 years ago
Your father is now planning to retire, and his employer has promised him a guaranteed, but fixed, income of $50,000 per year for
ohaa [14]

Answer:

(C) 18,844.47

Explanation:

You need to use the  Inflation-Adjusted Return formula:

InflationAdjustedReturn=\frac{1+return}{1+inflationrate}-1

So, basically you need to calculate it year by year. You can use excel, or an online calculator. I will attached you a link where you can find a good one. But this would be the process

InflationAdjusted ReturnYear1=\frac{1+return}{1+inflationrate}-1=\frac{1+50000}{1+0.05}-1=47,619

InflationAdjusted ReturnYear2=\frac{1+returnyear1}{1+inflationrate}-1=\frac{1+47,619}{1+0.05}-1=45,351

InflationAdjusted ReturnYear3=\frac{1+returnyear2}{1+inflationrate}-1=\frac{1+45,351}{1+0.05}-1=43,192

And so on...

InflationAdjusted ReturnYear20=\frac{1+returnyear19}{1+inflationrate}-1=\frac{1+19,787}{1+0.05}-1=18,844

Keep in mind that I did not write all decimals. You need to consider them if you want an exact answer

Online calculator:

https://www.ameriprise.com/research-market-insights/financial-calculators/savings-taxes-inflation/

3 0
3 years ago
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