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OLEGan [10]
3 years ago
6

Answer the next question on the basis of the following information for a bond having no expiration date: bond price = $1,000; bo

nd fixed annual interest payment = $100; bond annual interest rate = 10%. If the price of this bond falls by $200, the interest rate will __________.a. fall by 2.5 percentage points.
b. rise by 5 percentage points.
c. fall by 5 percentage points.
d. rise by 2.5 percentage points.
Business
1 answer:
Keith_Richards [23]3 years ago
6 0

If the price of this bond falls by $200, the interest rate will

d. rise by 2.5 percentage points.

Explanation:

  • Bond price = $1,000; bond fixed annual interest payment = $100; bond annual interest rate = 10%. If the price of this bond falls by $200, the interest rate will rise by 2.5 percentage points.
  • Bond valuation is the determination of the fair price of a bond.
  • the theoretical fair value of a bond is the present value of the flow of cash that streams in it is expected time to generate.
  • In order to calculate the bond price, one has to simply discount the known predict flow of cash.
  • When investors get anxious, they buy government bonds. Governments usually pay back their debts, so those bonds are at safety.
  • You can also lose money on a bond if you sell it before the maturity date for less than you paid or if the issuer pays on their payments.

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Answer:

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The Uniform Commercial Code (UCC) establishes that firm offers can only be made by merchants. They also apply only to the sale of goods, but the baseball card is a type of good.

The problem is that Debbie is not probably a merchant. In order for her to be considered a merchant, she would need to be in the business of buying and selling baseball cards on a regular basis.

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3 0
2 years ago
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3 years ago
Due to a number of lawsuits related to toxic wastes, a major chemical manufacturer has recently experienced a market reevaluatio
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Answer:

Current value = $550

Explanation:

You can solve this question using a financial calculator. I am using (Texas Instruments BA II plus)

First, since it is Semiannual coupon, adjust the interest rate to semi-annual rate and multiply  15 years by 2 since we have 2 semi annual periods per year.

<em>Note: If using the same calculator as me, key in the numbers first before the function .</em>

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Therefore the current value of this bond is $550 (rounded to whole number.)

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3 years ago
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