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Scilla [17]
3 years ago
7

1. "If bonds of different maturities are close substitutes, their interest rates are more likely to move together." Is this stat

ement true, false, or uncertain? Explain your answer.
Business
1 answer:
Alecsey [184]3 years ago
5 0

Answer:True

Explanation:

A bond is a debt Security issued either by large companies or Governments in order to raise money for capital projects. A Bond usually have maturity date(the date at which the bond will yield it interest or profit).

WHEN BONDS OF DIFFERENT MATURITIES ARE CLOSE SUBSTITUTES, WHEN THE INTEREST RATE OF ONE OF THE BONDS INCREASE,THE INTEREST RATE OF ITS CLOSE SUBSTITUTES WILL INCREASE BECAUSE THE EXPECTED RETURNS OF BOTH ARE NOT EXPECTED TO BE OUT OF THE NORMAL.

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The 8.5 percent bond of Fitness Center, Inc has a face value of $1,000, a maturity of 25 years, semiannual interest payments, an
Aleonysh [2.5K]

Answer:

Price of bond=$691.034

Explanation:

The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).

Value of Bond = PV of interest + PV of RV

Let us assume the bond had a per value of 1000 and also redeemable at par

The value of the bond  can be worked out as follows:

Step 1  

<em>Calculate the PV of interest payments</em>

semi Annual interest payment

= 8.5% × 1000 × 1/2=    42.5

PV of interest payment

= 42.5  × (1-(1.0629)^(-25×)/0.0629)

=643.6780

Step 2

PV of redemption Value

PV = 1000 × (1-(1.0629)^(-25×2)  = 47.35

Step 3

Price of bond

=643.678 + 47.356

=$691.034

Price of bond=$691.034

3 0
3 years ago
The following amounts were reported by Burke Company before adjusting its immaterial overapplied manufacturing overhead of $8,00
Alex_Xolod [135]

Answer:$722,000

Explanation:

The over applied overhead of $8000 is deducted from cost of goods sold of $730,000.

3 0
3 years ago
An agreement two parties enter into before marriage that clearly states the ownership rights each party enjoys in the other part
Effectus [21]

Answer:

prenuptial agreement

Explanation:

A prenuptial agreement or prenuo is one that is created between two people before marriage. A prenuo lists all the properties owned by each individual and action to be taken as regards ownership after the marriage.

Prenuptial agreement has been used by parties that are wealthy in marriages to protect their wealth from spouses that may take advantage of them and obtain their wealth after a divorce. For example a person may say his spouse is not entitled to ownership of his property after marriage.

7 0
3 years ago
Read 2 more answers
Cost leadership is most appropriate when a. industry rivalry is high and customers are very sensitive to prices. b. product inno
kvv77 [185]

Answer:

e. the power of buyers is low and barriers to entry are high.

Explanation:

  • The cost leadership is the establishing a competitive advantage by having the lowest cost of operations and cost leadership is often driven by the company efficiency in size and sales. And the cumulative expand has a well-defined scope and the economies have chosen strategist and consists of the simultaneous cost leaderships example as Walmart and is different from the price leadership.
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3 years ago
I need help with my assingemnt
Gekata [30.6K]

Answer:

idc

Explanation:

i do not care, not at all.

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3 years ago
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