Not all of the time because it can be very biased
Answer:
<em>The price of each of these bonds is </em><em><u>$1,600, </u></em><em>which means that the bonds sell at</em><em><u> par</u></em><em>. </em>
<em>Suppose that the market interest rate for bonds that are similar to the ReNew bond has increased to 7%. The price of the ReNew bond changes to </em><em><u>$1,558.00</u></em><em> , which means that it sells at </em><em><u>discount</u></em><em>. </em>
<em>Suppose that instead of rising, the market rate decreases from 6% to 4%. The new price of the bond changes to </em><em><u>$1,688.80</u></em><em>, which means that the bond sells at a </em><em><u>premium</u></em><em>.</em>
When the coupon rate and the market interest rate are the same, the price will be at par.
Interest rate increases:
Bond Price = Present value of coupon + Present value of bond price
Coupon = 6% * 1,600
= $96
Bond price = 96 * (1 - 1.07⁻³ / 0.07) + 1,600 / 1.07³
Bond price = $1,558.00
Interest rate decreases:
= 96 * (1 - 1.04⁻³ / 0.04) + 1,600 / 1.04³
= $1,688.80
Your "gross monthly income" is the amount you make BEFORE they take out any deductions.
Your "gross monthly income" is the amount you make AFTER they take out any deductions.
Answer:
1.$80,800
2.$45,450
3.$40,400
4.$82,483
Explanation:
Interest Rate Fiscal Year-End Interest Expense
1. 8 % December 31 2020000*8%*6/12 = $80,800
2. 9 % September 30 2020000*9%*3/12 = $45,450
3. 6 % October 31 2020000*6%*4/12 = $40,400
4 7 % January 31 2020000*7%*7/12 = $82,483
Answer:
a) Fall in men's demand = 35% ; b) Fall in women's demand = 8%
c) Price for men should be lower , price for women should be higher.
Explanation:
Elasticity of Demand denotes responsive change in demand, due to change in price. Elasticity = % change in demand / % change in price.
a) Fall in Men's demand = Elasticity x (% change in price) = 10 x 3.5 = 35%
b) Fall in Women's demand = Elasticity x % change in price = 10 x 0.8 = 8%
If elasticities for different market segments is different, monopolist (single seller) should sell at discriminated prices. The market segment having lower elasticity should be charged higher price, the market segment having higher elasticity should be charged lower price
- Men's Elasticity (3.5) > Women's Elasticity (0.8). So, same price rise would reduce more demand for men & less for women (shown in part a, b). So, the monopolist should charge higher price from women, lower price from men