Answer:
Tha annual effective yield rate for the bond is:
= 6.2%
Explanation:
a) Data and Calculations:
Bond par value = $1,000
Annual coupon rate = 6%
Annual spot interest rates = 7%, 8%, and 9% for year 1, year 2, and year 3 respectively
Current value of bond = $970 ($1,000 * 99% * 99% * 99%)
Annual coupon payments = $60 * 3 = $180
Effective rate for the three years = $180/$970 * 100 = 18.6%
Annualized effective yield rate = 6.2% (18.6%/3)
OR
Annualized effective yield rate = (Annual coupon payments/Current value of bonds)
= 6.2% ($60/$970)
Answer:
answer is Cannot be determined
Explanation:
given data
household income = $50,000
increases = 10% per year
time = 2 year
solution
as we know that here mean is increase by 10 percentage
but from the mean percentage increase in does not meaning that it will increase median also with same percentage
because median also increase by some percentage if data is move up
but we can not say it will move with same percentage
so here answer is Cannot be determined from given data
