1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Dmitry [639]
3 years ago
6

Which of the following statements about the relationship between interest rates and bond prices is true? I) There is an inverse

relationship between bond prices and interest rates. II) There is a direct relationship between bond prices and interest rates. III) The price of short-term bonds fluctuates more than the price of long-term bonds for a given change in interest rates. (Assuming that coupon rate is the same for both) IV) The price of long-term bonds fluctuates more than the price of short-term bonds for a given change in interest rates. (Assuming that the coupon rate is the same for both)
Business
1 answer:
BaLLatris [955]3 years ago
7 0

Answer: A. I and IV only

Explanation:

The relationship between bond prices and interest is an inverse one. This is because bonds have fixed rates so when for instance interest rates increase, the fixed rate of bonds will become less attractive as people would want to make the higher interest. They will therefore demand less of bonds and the prices will drop. The reverse is true.

Also, long term bonds are more affected by interest rate changes then short term bonds. This is because, as they have a longer term till maturity, they will be even less attractive when interest rates rise.

You might be interested in
True or false: zappos sells all four categories of consumer products (convenience, shopping, specialty, unsought)
oee [108]

True: Zappos sells all four categories of consumer products (convenience, shopping, specialty, unsought).

Zappos carries products that are speciality and unsought by consumers.  Using their website, you are able to conveniently order your products with customer service readily available to help. Zappos is convenient because they carry a wide-range of products, brands and styles. They have free shipping and free returns all year, which is something most retailers do not offer.

6 0
3 years ago
Read 2 more answers
During the middle years of last decade, the exchange rate of the U.S. dollar has declined against the currencies of its major tr
Aleks04 [339]

Answer:

Because there are other factors that influence the weakening or strengthening of the dollar, not just the dollar exchange rate in relation to the exchange rates of other countries' currencies.

Explanation:

Although the United States has registered increases in the trade deficit, that is, when the country imports more goods and services from abroad than it exports, there are other factors that determine whether the country's currency is valued or not. In the case of the dollar, its value has not decreased despite the fall in the exchange rate of the dollar in relation to the currencies of its main trading partners due to the fact that the dollar is the main reserve currency in the world, which means that the dollar is the fashion of commercial transaction in the world, therefore its value is not lost in relation to other currencies, since several important transactions in the world such as gold and oil commodities are traded in dollars.

There is also the fact that the US attracts a lot of international investment for US Treasury bills, which helps to strengthen the dollar.

6 0
3 years ago
Sectoral shifts, frictional unemployment, and job searches Suppose the world price of steel falls substantially. The demand for
TEA [102]

Answer:

fall

rise

frictional

b. Improving a widely used job-search website so that it matches workers to job vacancies more effectively

Explanation:

A fall in the price of steel would reduce the profitability of producing steel for steel producing companies. Hence, the supply of steel would fall. as a result, less labour would be needed, so the demand for labour would fall.

A fall in the price of steel would reduce the cost of producing cars and thus increase the production of cars. as a result, more labour would be employed to make cars.

Frictional unemployment is when labour is unemployed between the time he leaves his current employment and time he finds another. by improving on the job search website, workers would be matched faster with available jobs, this frictional unemployment would decrease.

7 0
3 years ago
. A building owner charges net rent of $20 in the first year, $21 in the second year, and $22 in the third year, but is providin
Anit [1.1K]

Answer: $17.28

Explanation:

6 month free concession in first year drops rent to:

= 20 / 2

= $10

Effective rent = [Present value of Year 1 rent + Present value of Year 2 rent + Present value of Year 3 rent ] / [ 1 - (1 / (1 + rate)^ number of years) / rate]

= [(10 / (1 + 10%) ) + (21 / (1 + 10%)²) + (22 / (1 + 10%)³)] * [1 - (1 / (1 + 10%)³/ 10%)]

= (9.09 + 17.355 + 16.5289) / 2.48685

= $17.28

8 0
3 years ago
There are a number goods that over time, for a variety of reasons, transition from being a normal good to an inferior good or fr
boyakko [2]

Answer:

d. the camry becomes an inferior good because the good is now perceived as lower in quality than a lexus

Explanation:

There are a number goods that over time, for a variety of reasons, transition from being a normal good to an inferior good or from being an inferior good to a normal good. One such example of a good is the Toyota Camry. In the 1980s, more income for a household usually resulted in more Camrys being purchased. However, today more Toyota Camrys are purchased by households that have experienced a reduction in income.

How could this happen?

<u>This could only have happened because of a change in perception in households over time. </u>

It is stated in the Scenario that ''today more Toyota Camrys are purchased by households that have experienced a reduction in income.''

<u>That means Toyota Camry has become an inferior good that is purchased more when income falls.</u>

<u>Hence, the only reason the scenario would have occurred is that the camry becomes an inferior good because the good is now perceived as lower in quality</u> than a lexus

7 0
3 years ago
Other questions:
  • 10. In earned value analysis (EVA), we found: SV = -$7,800 at certain point. If the project has a total budget = $65,000 and tot
    7·1 answer
  • In the United States, what does the general level of a family’s income have to do with the amount of cash the family is likely t
    9·1 answer
  • John deposited $2,000, at the end of every month for 2 years in a savings account. if the account paid 6% interest, compounded m
    8·1 answer
  • Whipple Corp. just issued 280,000 bonds with a coupon rate of 6.02 percent paid semiannually that mature in 25 years. The bonds
    9·1 answer
  • Sandhill Corporation has temporary differences at December 31, 2020, that result in the following deferred taxes.
    12·1 answer
  • Lexi Company forecasts unit sales of 1,640,000 in April, 1,250,000 in May, 810,000 in June, and 1,650,000 in July. Beginning inv
    15·1 answer
  • The mangerial act of developing, implementing, and controlling marketing programs is called ___________.
    15·1 answer
  • Over time, external monitoring processes should capture information about the external environment in a format that can be refer
    5·1 answer
  • Write a sentence with a word Gross Domestic Product:​
    11·2 answers
  • Small dollar value purchase orders can be efficiently and effectively managed by?
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!