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tankabanditka [31]
3 years ago
11

You have been offered a 10-year bond issued by Tiger Inc., at a price of $950.00. The bond has a coupon rate of 8% and pays the

coupon semiannually. Similar bonds in the market offers a yield of 9% today. Should you buy the bonds at the offered price
Business
1 answer:
andriy [413]3 years ago
6 0

Answer:

since the market price is lower than the offered price, you should reject this offer

Explanation:

bond's market value

PV of face value = $1,000 / (1 + 4.5%)²⁰ = $414.64

PV of coupon payments = $40 x 13.00794 (PV annuity factor, 20 periods, 4.5%) = $520.32

market price = $934.96

since the market price is lower than the offered price, you should reject this offer

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Answer:

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Income inequality refers to the uneven distribution of income among the population of a particular place. It is the difference in the allocation of income in a particular country.

Income inequality occurs across different segments of the population such as gender(male and female), ethnic group, occupation, geographical location etc.

The Gini index is widely used to compare disparities in income.

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Answer:

True.

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Read more about price changes

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