Answer:
The answer to the question is B I51,753 bonds
Explanation:
The present price of the bond and the total amount to be raised of $170m were used in arriving at the number of bonds to be issued.
n 20
Coupon 6.60%
YTM 7.7%*1000=77
FV 1000
PV ($1,120.25)
The current price of the bond $1,120.25
Total amount to be raised $170,000,000
Number of bonds to be issued=total amount /bond price 151,752 approx...151753
Find attached spreadsheet with formulas so as to be able to follow through.
Answer:
A) interest rates will rise.
Explanation:
When the FED buys US securities it is carrying out an expansionary monetary policy. It reduces the interest rate of US securities so that more investors are willing to sell their US securities to the FED since their rate of return is very small.
If the FED stops buying back US securities, it means that they will stop their expansionary monetary policy, so the FED will start to increase US securities' interest rates. That way investors will be willing to keep their US securities and will not sell them since their rate of return has increased. This increase in the interest rate will lower the price of US securities and decrease the money supply.
The answer to the nation who is one with unstable leadership, whose policies are driven by ideology rather than by economic or human costs and benefits is the rogue nation. Also the rogue nation does not respect other nations and even the other countries in its international actions.
Answer:
B.sacrifice consumption goods and services now in order to enjoy more consumption in the future.
Explanation: Tradeoff is a term used in Economics to refer to the sacrifice of a particular quality or goods in order to enjoy the benefits of the use of another.
Tradeoffs are applied in Economic decisions especially in a situation where there are two competing needs, it is applied in order to choose the most urgent and necessary while the other can be considered for a later day or period.
Applying tradeoffs in Economic decisions will lead to an increase of one factor or need which will lead to a decrease in another factor or need.
Answer:
9,792 total interest expense
Explanation:
face value 96,000
issued at 94,080
<em>discount 1,920</em>
<u><em>amortization of the bond:</em></u>
discount/total payment
10 years atsemiannual payment = 20 payment
1,920/20 = 96
<u><em>cash proceed:</em></u>
96,000x 10%/2 = 4,800
discount 96
<u>interest expense 4,896 per payment</u>
2 payment per year 9,792 total interest expense
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