<span>If an increase in the supply of a product in the market results in a decrease in price, but no change in the quantity traded, then the quantity of products will be growing and growing in the stock. this will again lead to a decrease in price and consumes more time to sale their stock. This will create a heavy loss to the investor. It may be overcome by innovative thoughts such as stopping the production of current product and launching a new product with available materials. So that it will balance the production and sale.</span>
Answer: C. interest expense will not be a constant dollar amount over the life of the bond.
Explanation:
When a bond is sold at a discount, the discount will have to be amortized over the life of the bond to ensure that it reaches par at maturity.
As a result, the interest expense will be based on a larger figure every year which would mean that it would have to be larger each time. t will therefore not be a constant dollar amount over the life of the bond.
Answer:
$739.72 ≈ 739.72
Explanation:
we can use an excel spreadsheet and the present value function to calculate the expected price of each bond ⇒ =PV(rate,nper,pmt,fv,[type])
- fv = $1,000
- pmt = $1,000 x 7.25% x 1/2 = $36.25
- nper = 60
- rate = 10% / 2 = 5%
- present value = ?
=PV(5%,60,36.25,1000) = -739.72 since excel calculates the initial investment, it is always negative, so we just change the sign.
