Solution :
Given :
Coupon rate for Bond J = 3%
Coupon rate for Bond K = 9%
YTM = 6 %
Therefore,
The current price for Bond J = $ 718.54 =PV(6%/2,13x2,30/2,1000)x -1
The current price for Bond K = $ 1281.46 =PV(6%/2,13x2,90/2,1000)x -1
If the interest rate by 2%,
Bond J = $ 583.42 = -18.80% (change in bond price)
Bond K = $ 1083.32 = -15.46% (change in bond price)
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Hope this helps! Have a nice day :)
Answer: b. Set higher prices to the students as their demand is relatively more inelastic.
Explanation:
Price elasticity of demand measures the change in quantity demanded to changes in price levels.
If demand is inelastic, a small change in price has a small effect on quantity demanded. An inelastic demand usually has a coefficient of less than 1.
The elasticity of demand for students and senior citizens are both inelastic but that of the students is greater than that of senior citizens. They are less responsive to price changes when compared with senior citizens.
Answer:
14,500
Explanation:
Income = Total revenue - Total cost
Total cost = total Fixed cost + Total variable cost
total Fixed cost = $14,000
Total Variable costs = variable cost per unit x quantity = $4q
Total cost = $14,000 + $4q
Total revenue = price x quantity = $16q
$160,000 = = $16q - $14,000 - $4q
$174,000 = $12q
Q = 14,500
I hope my answer helps you
