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
castortr0y [4]
3 years ago
6

Lee is considering buying one of two newly-issued bonds. Bond A is a twenty-year, 7.5% coupon bond that is non-callable. Bond B

is a twenty-year, 8.25% bond that is callable after two years. Both bonds are comparable in all other aspects. Lee plans on holding his bond to maturity. What should Lee do if he feels that interest rates are going to decline by 2% in the near future and then remain relatively stable thereafter
Business
1 answer:
vova2212 [387]3 years ago
6 0

Answer:

Multiple choices below are missing:

A) purchase Bond A

B) purchase Bond B

C) purchase neither A nor B at this time

D) negotiate a higher rate on Bond A

The correct option is A,purchase bond A.

Explanation:

By purchasing Bond A,Lee is assured interest payment of 7.5% for a period of twenty years,hence the issuer cannot call the bond if interest rate drops by 2% in order to issue a lower interest-bearing bond which would be cheaper cost-wise.

However, if Lee purchases Bond B with current coupon of 8.25%,the interest is only guaranteed for a period of two years,since the issuer has the prerogative of calling back the bond after two years should interest fall in order to issue another bond that commands lower interest rate.

You might be interested in
A gardener has three herb beds she wishes to plant in a design that consists of three equilateral triangles laid out in such a w
densk [106]
The design is shown in the attached picture. An equilateral triangle has sides that have equal measurements. On the other hand, a vertex is the terminal point of at least two line segments. Therefore, when you join three equilateral triangles sharing a common vertex, that simply means that they have a common point.

8 0
3 years ago
Product focused processes: allow more customization, but are not very efficient. are desirable because resource needs increase s
Vikki [24]

Answer:

The correct answer is letter "C": are processes that are specialized for relatively few products or customer groups.

Explanation:

Product-focused processes are those that follow a market segmentation. Companies decide to what sector of the market they will drive their efforts towards and specializes in the manufacturing of a determined good.

Production tends to involve high volumes and low variety process but provides manufacturers relatively high facility utilization. Examples of product-focused processes are the production of light bulbs or bolts.

4 0
3 years ago
Which of the following statements are true?
kkurt [141]

Answer:

D- income statement accounts are temporary accounts and do not retain their balances from one period to the next.

Explanation:

quizlet

8 0
2 years ago
Which of the following is a retirement plan offered by banks and investment companies in which an individual can deposit money t
Makovka662 [10]
Roth IRA would be the answer.
6 0
3 years ago
Read 2 more answers
If the MPC = .80, all taxes are lump-sum taxes, and the equilibrium GDP is $40 billion below the full-employment GDP, the size o
Sav [38]

Answer:

recessionary gap = 8 billion

so correct option is c) $8 billion

Explanation:

given data

MPC = 0.80

GDP = $40 billion

to find out

the size of the recessionary gap

solution

we get here first Multiplier  that is

Multiplier  = \frac{1}{1-MPC}     ..................1

Multiplier  = \frac{1}{1-0.80}

Multiplier  = 5

so recessionary gap will be

recessionary gap = \frac{GDP}{5}     ................2

recessionary gap = \frac{40}{5}

recessionary gap = 8 billion

so correct option is c) $8 billion

5 0
3 years ago
Other questions:
  • "Willow's team has split up the contributions for its group writing project equally, with individual team members committing var
    8·1 answer
  • George is looking at the colors on a paint swatch card to select the right shade of red for his wall. he is able to differentiat
    12·1 answer
  • Theresa sued her former employer for age, race, and gender discrimination. She claimed $200,000 in damages for loss of income, $
    5·1 answer
  • Which of the following is an example of a "back room" operation for an airline company? A. assisting passengers in getting off o
    15·1 answer
  • Charles lackey operates a bakery in Idaho, Falls Because of its excellent product location, demand has increased by 35% in the l
    11·1 answer
  • The Harrisburg Store has net working capital of $2,715, net fixed assets of $22,407, sales of $31,350, and current liabilities o
    10·1 answer
  • Which of the following statements is true regarding competition?. . A) Competition among buyers decreases sellers' profits.. . C
    5·2 answers
  • Mrs. Eller's corporate employer has a cafeteria plan under which its employees can receive a $3,000 year-end Christmas bonus or
    14·1 answer
  • Identify the type of costs that would be considered incremental cost for a decision to close stores. (You may select more than o
    11·1 answer
  • What will help a person with power of attorney make good decisions?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!