Answer:
At face value
Explanation:
Short term notes are always recorded at face value, and that applies to both interest and non-interest bearing short term notes.
Non-interest bearing long term notes must be recorded at their discounted value, i.e. you must discount the long term note' face value by the discount rate used by the company.
Answer:
$746,617.36
Explanation:
Using a financial calculator, input the following to calculate the price of the US Treasury note. I'm using Texas Instruments BA II Plus model;
Face value of the bond ; FV = 1,000,000
Semiannual coupon payment; PMT = Coupon rate * Face value ;
PMT= (3%/2) *1,000,000 = 15,000
Time to maturity of the note ; N = 4*2 = 8
Semiannual interest rate; I/Y = 11% /2 = 5.5%
then compute the Present value of bond or price; CPT PV = $746,617.36
Answer:
b) surplus; shortage; up; fall
Explanation:
If the bond market and money market start out at equillibrum, and money supply is increased there will be an excess (surplus) of money over bonds.
That is more money to buy less bonds. The relative scarcity of bonds will result in a shortage (bond supply cannot meet demand).
As a result of the shortage price of bonds will increase because more people are looking for the scarce bonds.
Price of bonds has an inverse relationship with interest. As price increases interest rates will fall.
For example consider a zero coupon bond of $1,000, being sold for low price of $850. On maturity it will yield gain of $150.
If the price rises to $950 the yield will only be $50.
So as price increases and interest (yield) decreases, it will no more be attractive to investors and demand will reduce to meet the available supply of bonds.
Answer:
Pedestrian : A person who walks on foot rather than in vehicles.
Anything that is possessed with funds or luxury or heirloom items
