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Minchanka [31]
3 years ago
5

A bond issue with a face amount of $400,000 bears interest at the rate of 8%. The current market rate of interest is 9%. These b

onds will sell at a price that is:
Business
1 answer:
zimovet [89]3 years ago
5 0

The question is incomplete. The complete question is,

A bond issue with a face amount of $400,000 bears interest at the rate of 8%. The current market rate of interest is 9%. These bonds will sell at a price that is:

More than $400,000.

Equal to $400,000.

Less than $400,000.

The answer cannot be determined from the information provided.

Answer:

The bond sells at a price less than $400000

Explanation:

The coupon rate of bonds is the interest rate at which the bond will pay the interest. When the coupon rate of a bond is less than the market interest rate or the Yield to Maturity (YTM), the bond sells at a discount in the market. On the other hand, if the coupon rate of bond is greater than the market interest rate, the bond sells at a premium.

As the coupon rate of the given bond is 8% which is less than the market interest rate of 9%, the bond sells at a discount. Thus, the price at which the bond sells is less than $400000.

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The financial markets are a relatively new technological development created in the last 50 years.
Thepotemich [5.8K]

Answer:

False

Explanation:

Wall Street, which is one of the most famous financial markets in the US was established in 1792. In Europe, financial markets exist since the middle ages. Modern banking started in Italy in the 12th century.

Telecommunications improved how financial markets work during the 20th century and expanded their reach, but they are almost 900 years old.

8 0
3 years ago
What is the present value of $5,000 received 5 years from now if the discount rate is 5% (rounded to the nearest dollar?a. $6,38
e-lub [12.9K]

Answer:

The correct option is b. $3,918.

Explanation:

This can be calculated using the simple present value (PV) formula as follows:

PV = FV / (1 + r)^n ............................ (1)

Where;

PV = Present value of the amount = ?

FV = Future value of the amount = $5,000

r = Discount rate = 5%, or 0.05

n = number of years = 5

Substituting the values into equation (1), we have:

PV = $5,000 / (1 + 0.05)^5

PV = $5,000 / 1.05^5

PV = $5,000 / 1.2762815625

PV = 3,918

Therefore, the correct option is b. $3,918.

6 0
3 years ago
If testing cannot be completed any earlier than four days after the prototype has been built, what type of lag exists?
Dahasolnce [82]

Answer: finish to finish

Explanation:

A lag is minimum amount of time that is required for a dependent activity have to be delayed to either start or end.

If testing cannot be completed any earlier than four days after the prototype has been built, the type of lag that exists is finish to finish.

6 0
3 years ago
One method used by some analysts to estimate the future value of a stock is the dividend growth model. This model would probably
Ray Of Light [21]

Answer:

I am sure that it is D. a large cap stock

Explanation:

Large cap stocks already have a positive growth sentiment and

based on how much dividends are paid out they can estimate the future

value of a stock.

8 0
3 years ago
Measuring business activities and reporting those measurements to external parties is the function of ______ accounting.
Andru [333]

Answer:

Financial

Explanation:

Basically, there are two forms of accounting for measuring business activities namely; Financial accounting and Management accounting.

Financial accounting involves the measurement of the business activities over a period using a defined framework or standard such as US GAAP, IFRS, etc. This is usually presented in a form of statements called the financial statements and is used by internal and external stakeholders such as Government, creditors, shareholders etc.

Management account is usually prepared for management purposes and measures the company's actual activities against the budget or plan.

The right answer is financial accounting.

3 0
3 years ago
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