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larisa86 [58]
3 years ago
14

When a $1000 bond is initially sold at 5 percent "coupon" yield for 30 years, $50 (.05 x $1,000) interest per year is paid to th

e buyer of the bond. However, if interest rates decrease to 4 percent for similar bonds issued later on, then the market price of the initial bond will _________________ ..
Business
1 answer:
seraphim [82]3 years ago
7 0

Answer:

Increase.

Explanation:

We know,

Coupon rate > yield to maturity = Premium or > Market price

Here,

Coupon rate = 5%

Interest rate or YTM = 4%

From the formula,

We can say that as the coupon rate is greater than YTM, the market price of a $1000 issued bond will be increased. We can say that the bond is selling at a premium price because the interest rate is decreasing.

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3 years ago
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Your friend Scotty informs you that in 2019 he received a tax-free reimbursement of some medical expenses he paid in 2018. Which
DanielleElmas [232]

Answer:

c.Scotty did not itemize deductions in 2018

Explanation:

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3 0
3 years ago
Temporary investments such as in trading securities are a.recorded at fair market value and reported at fair market value b.reco
g100num [7]

Answer:

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Explanation:

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3 years ago
A firm is a competitive seller of output at amarket price of $3. The only resource itrequires to create its product is labor, wh
bulgar [2K]

Answer:

B. $6

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3 years ago
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