Answer:
Yield to Call: 12.68%
Explanation:
We will calculate the YTC
To do so we will list on exce lthe cash flow for the bond life:
0 -1000.0 (purchased at face value)
1 120.00 (coupon payment: 1,000 x 12%)
2 120.00
3 120.00
4 120.00
5 120.00
6 120.00
7 1190.00 (1,70 call price + 120 coupon payment)
below the cash flow we enter the IRR function and select the cash flow
this will give us the YTC: 0.126795
There is another way to calcualte the YTC but is done by approximation and is not an exact answer:
Coupon value = 120
Face value = 1,000
P = call = 1,070
n= 7 years
Result: 12.5603865%
as notice this differs with the excel answer as it is an aproximation nto an exact answer.
Answer:
The correct answer is d. risk aversion.
Explanation:
Risk aversion is an investor's preference for avoiding uncertainty in their financial investments.
Due to this attitude towards risk, this type of individuals directs their investment portfolio to safer financial assets even though they are less profitable.
The phenomenon of risk aversion implies by definition a certain level of risk rejection by a person who invests in financial markets. A person may face a risk aversion situation, be risk neutral or be risk prone.
Answer:
The advertising used the Scientific evidence technique.
Explanation:
his technique attempts to appeal the masses to use the advertised product, by providing the audiences with survey results. The advertisers often use statistical evidences and market surveys to publicize their product.