1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
grin007 [14]
3 years ago
6

Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years

to maturity, whereas Bond Dave has 18 years to maturity. If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Sam
Business
1 answer:
Natali5045456 [20]3 years ago
4 0

Answer: -12.1%

Explanation:

Bond Sam was priced at Par which means it could have been priced at $1,000 and its yield was the same as the coupon rate of 8%.

If interest rates rise by 5%, the yield becomes:

= 8% + 5%

= 13%

Price of bond is attached:

Yield = 13% /2 = 6.5% per semiannual period

Coupon = 8% * 1,000 * 0.5 = $40 per semi annual period

Period till maturity = 3 * 2 = 6 semiannual periods

Price = $878.97

Percentage change in price:

= (878.97 - 1,000) / 1,000 * 100%

= -12.1%

You might be interested in
Laws designed to promote competition and prevent the information of monopolies are known as _____ laws
Soloha48 [4]
The answer is B. antitrust laws.

Antitrust laws are designed to keep competition fair between corporations to protect consumers. These laws promote such competition and discourage monopolies from operating as such.
6 0
3 years ago
Read 2 more answers
Assuming the correlation between the annual returns on the two portfolios is indeed zero, what would be the optimal asset alloca
den301095 [7]
Since you provide no relevant number, 

In order to find out the optimal Asset allocation, you should find out which investment opportunities that Provide the highest return with the lowest standard deviation in the risk department

hope this helps
4 0
3 years ago
Types of conclusion <br> In a nut shell, when you look
Mars2501 [29]

In a nut shell, when you look belongs to reflective type of conclusion. Hence, the type of conclusion in the phrase above is reflective conclusion. Read below about types of conclusion

<h3>What are the types of conclusion?</h3>

Majorly, the types of conclusion include: embedded, retrospective, reflective, and projective forms are four main types of conclusions applicable for different academic papers when writing.

Therefore, the correct answer is reflective conclusion. This is so, because, the introductory phrase after the transitional marker signals reflection, 'when you look...' hence, the correct address is reflective conclusion.

learn more about reflective conclusion: brainly.com/question/5012638

#SPJ1

5 0
2 years ago
cehgg In general, what is the limitation on the deductibility of business interest expense? What happens to any business interes
qaws [65]

Answer:

Business interest deduction limitation does not allow net business expenses (business interest expense less business interest income) greater than 30% of the adjustable tax income of the business.

Amounts that fall into this category can be carried for Ward to future tax years for indefinite number of times until it can be applied.

Individuals exempted from business income deduction limitation include real estate and farming businesses. For these businesses they are not automatically exempted, but must elect to be exempted.

Explanation:

8 0
3 years ago
In terms of microeconomic analysis, what is the function of utils?.
Tems11 [23]

Answer:  Utility function measures consumers' preferences for bundles of goods or services.

5 0
2 years ago
Other questions:
  • Newcastle Coal Co. owns a warehouse that it is not currently using. It could sell the warehouse for $300,000 or use the warehous
    7·1 answer
  • Matthew's Fish Fry has a monthly target operating income of $7,200. Variable expenses are 60% of sales and monthly fixed expense
    12·1 answer
  • Grayhawk Company reported net credit sales of $588,000 for the year ending December 31, 2019. On January 1, 2019, the Allowance
    13·1 answer
  • Tom quit his $65,000 a year corporate lawyer job to open up his own law practice. In Tom's first year in business his total reve
    5·1 answer
  • On April 17, 2021, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs ne
    7·1 answer
  • During the current year, Morgan, Inc., had net income of $657,000. Morgan also recorded $203,000 in deprecation expense and had
    8·1 answer
  • How would you expect each of the following to affect the economy-wide demand for U.S. money (currency)? a. Competition among bro
    15·1 answer
  • CDB stock is currently priced at $77. The company will pay a dividend of $5.37 next year and investors require a return of 11.8
    8·1 answer
  • Which report is constructed immediately prior to preparing the financial statements with the purpose of demonstrating that the a
    15·1 answer
  • A broker should establish policies, rules, procedures, and systems for the office in order to supervise the salespeople and mana
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!