Answer:
Bondholders have a degree of legal protection against default risk, but it is not comprehensive.
Explanation:
A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.
The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid. Thus, a bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.
In Economics, bonds could either be issued at discount or premium. A bond that is being issued at a discount has its stated rate lower than the market interest rate, on the specific date of issuance while a bond that is issued at a premium, has its stated rate higher than the market interest rate on the specific date of issuance.
Default risk in bonds refer to the risk that a bond issuer (borrower) is unable to pay the principal or interest agreed upon in the contract with the bondholder (lender) in a timely manner.
Hence, the true statement about default risk is that bondholders have a degree of legal protection against default risk, but it is not comprehensive.
Answer:
The correct option is Dana might be indifferent between C, A, and B.
Explanation:
Note: See the attached photo for the indifference curve showing points A, B and C.
The answer can be explained using an indifference curve.
An indifference curve is a graph that depicts the combination of two commodities that provide equal satisfaction or utility to the consumer. A consumer is indifferent between the two commodities at each point on an indifference curve because all points on the curve provide him with the same level of satisfaction or utility.
In the attached photo, bundles A, B and C are plotted as points on the same indifference curve (IC). Since points A, B and C are on the same IC, it therefore implies that Dana might be indifferent between C, A, and B.
Therefore, the correct option is Dana might be indifferent between C, A, and B.
Frank and lillian gilbreth developed the principle of motion economy, which said that every job could be broken down into a series of elementary motions. The motion economy has principles that are in place to improve the manual work within a manufacturng career field. These are to help a manufacturer worker not be exhausted so quickly and reduce the trauma that may occur within this career field.
Answer:
$4,038
Explanation:
Present value (PV) is the current value of a future sum of money or stream of cash flows given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows.
Present Value = Future Value x (1/ ( 1 + interest rate ) ^ number of periods)
Present Value = 6,000 x (1/ ( 1 + 0.08) ^ 5)
Present Value = 6,000 x 0.68058
Present Value = $4,038
