To answer this item, we assume that the interest rate is simple, such that the yearly rate was only divided by 12 months in order to determine the rate per month. Hence, to answer this item, we simply have to multiply the given percent by 12.
rate of interest/year = (12)(0.85%) = 10.2%
Therefore, the answer is 10.2%.
The answer is Inelastic Demand. Hope this helps!!!
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When the YTM is lower than the bond's coupon rate, the bond's market value exceeds its par value (premium bond). Bonds are selling at a discount if their coupon rate is smaller than their YTM. A bond is trading at par if its coupon rate is equal to its yield to maturity (YTM).
<h3>What is the cost of a $1,000 par value, three year, zero-coupon bond?</h3>
(a) A three-year zero-coupon bond with a face value of $1,000 would have a present value (or price) of 874.69 with a yield of 4.564 percent.
<h3>What is the yield to maturity on a discount bond with a $1000 face value that will mature in a year and sell for $800?</h3>
The yield to maturity is determined using the following formula with the current price of $800: 800 = 1000 / (yield to maturity plus one) Yield to maturity Equals 1 plus yield. Yield until maturity equals 25%
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Answer:
The correct answer is A) the substitution effect
Explanation:
In other words, the substitution effect is when sales fall because the consumers change into cheaper alternatives when its price rises.