The price elasticity of the bond, based on the years to maturity and the required rate of return is -0.494
<h3>How to find the price elasticity of he bond?</h3><h3 />
First, find the new price of the bond:
= 1, 000 / ( 1 + 15%)⁵
= $497
The change in price:
= (497 - 567) / 567
= -12.3%
Then find the percentage change in the required rate of return:
= (15 - 12%) / 12
= 25%
The price elasticity of the bond is:
= -12.3% / 25%
= -0.494
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Answer: The values are missing below are the values
a. $105
b. $95
answer :
a) $5
b) -$5 ( loss )
Explanation:
From the perspective of the long position for each of the two options upon expiration
a) For $105
for the long position ( long call ) since the expired price > than the exercise price
i.e. $105 > $100 the profit = $105 - $100 = $5
b) For $95
For the long position ( long call ) since the expired price < than the exercise price
i.e. $95 < $100 the profit = $95 - $100 = - $5 ( a loss is incurred )
Answer: The following statements are true about this natural monopoly:<em> </em><u><em>It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers.</em></u>
Natural monopoly is a form of monopoly that persists because of start-up costs of administrating a business organization in a particular industry. A organization with natural monopoly will be the only supplier of a commodity or service in an industry.
Answer:
$135,000
Explanation:
The realized gain can be calculated as under:
Realized Gain = Market Value received - Adjusted Basis
Here
Market Value received is $375,000 (350k + 25k)
Adjusted Basis $240,000
By putting values, we have:
Realized Gain = $375,000 - $240,000 = $135,000
