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konstantin123 [22]
3 years ago
10

n investor purchased the following five bonds. Each bond had a par value of $1,000 and a 8% yield to maturity on the purchase da

y. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 7%. What is the percentage change in price for each bond after the decline in interest rates
Business
1 answer:
Vilka [71]3 years ago
3 0

Answer:

14.29%

Explanation:

An investor purchased the following five bonds.

Each bond had a par value of $1,000 and a 8% yield to maturity on the purchase day.

Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 7%.

What is the percentage change in price for each bond after the decline in interest rates

Generally, the relationship can be expressed as interest rate = Coupon Payment / Face Value.

At purchase coupon rate = $80/$1000 = 8%

Thereafter coupon rate = $80/Revised bond price = 7%

Solving as : Revised bond price x 0.07=  $80

Revised bond price = $80 / 0.07 = $1,142.85

Therefore % change in bond price = [($1,142.85 - $1000) / $1000] x 100 = 14.29%

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Which of the following best describes why German firms were nationalized after World War II?
Akimi4 [234]

Answer:

<u>D. Happenstance.</u>

Explanation:

The fact that German firms were nationalized has often been regarded as mere happenstance; meaning it just occurred based on the circumstances they were in immediately after World War II.

It thus encompasses several factors such as the cost of operations, changes in government, etc, not just one factor.

3 0
3 years ago
Stock R has a beta of 1.8, Stock S has a beta of 0.75, the expected rate of return on an average stock is 9%, and the risk-free
PIT_PIT [208]

Answer:

Stock R more beta than Stock S = 4.2%

Explanation:

given data

Stock R beta = 1.8

Stock S beta = 0.75

expected rate of return = 9% = 0.09

risk-free rate = 5% = 0.05

solution

we get here Required Return

Required Return (Re) = risk-free rate + ( expected rate of return - risk-free rate ) beta  ...........1

Required Return (Re) = 0.05 + ( 0.09 - 0.05 ) B

Required Return (Re) =

so here

Stock R = 0.05 + ( 0.09 - 0.05 ) 1.8

Stock R = 0.122  = 12.2 %

and

Stock S = 0.05 + ( 0.09 - 0.05 ) 0.75

Stock S =  0.08 = 8%

so here more risky stock is R and here less risky stock is S

Stock R is more beta than the Stock S.

Stock R more beta Stock S =  12.2 % - 8%

Stock R more beta Stock S = 4.2%

4 0
3 years ago
In Littleville, which has 1,000 residents, 400 people do not currently work. Of these 400 persons, 240 are under age 16, 10 are
marin [14]

Answer:

7.69%

Explanation:

The official unemployment rate includes people who do not have a job but are able to take a job and are currently seeking one.

People with part time jobs are considered employed.

Littleville has 1,000 residents, 600 are employed = 400 do not work but how many are considered unemployed:

400 - 240 (under age 16) - 10 (institutionalized) - 100 (are not looking for work, including students and homemakers) = 50 unemployed

Littleville's unemployment rate = number of unemployed / total labor force = 50 / (600 + 50) = 50 / 650 = 7.69%

6 0
3 years ago
What happens to the price of these needed goods if production declines and there are fewer goods to go around?
Lostsunrise [7]

Answer:

the price increases

Explanation:

its inflation due to the decrease in production of the the product but not the need for it the price will rise.

5 0
3 years ago
An establishment owned by two or more persons in which only one person has unlimited personal liability for the business describ
chubhunter [2.5K]
Limited partnerships
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