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
Important guidelines for the use of statistics in a speech?
Katyanochek1 [597]
Use reputable, authoritative, unbiased sources for your statistics
4 0
3 years ago
How long does it take to get approved for rental assistance?.
shtirl [24]
Typical wait time is 3 months
6 0
2 years ago
Match the following terms to the correct definition. A measure of process output divided by input that helps us determine the ef
padilas [110]

Answer:

3.

2.

5.

4.

1.

Explanation:

A measure of process output divided by input that helps us determine the effectiveness of the process. 3. Productivity  

A measure of process output divided by only one input of the many possible inputs required to make the desired output. 2. Single-Factor Productivity  

The measure of process output divided by more than one input, where those inputs must be expressed in a common unit of measure, like dollars. 5. Multi-Factor Productivity  

A measurement of the actual output relative to the standard output expected (effective capacity). 4. Efficiency  

A measurement of the actual output relative to the optimal output expected (design capacity). 1. Utilization  

7 0
3 years ago
Ed is a self-employed heart surgeon who has incurred the following reasonable expenses:$1,000 in air fare to repair investment r
lyudmila [28]

Answer:

A. $1,300 "for AGI.

Explanation:

The computation of the deductible amount is shown below:

= Air fare to repair investment rental property + 50% × (Meals + tickets to a football game with hospital administrators)

= $1,000 + 50% × ($500 + $100)

= $1,000 + $300

= $1,300

For meals and tickets, 50% deduction is applicable whereas for the air fair full deduction is applicable

And, for investment in seminar no deduction is allowed

6 0
4 years ago
Please hurry!
Ivan
You can make sure to connect only to networks you are familiar with, and never enter your personal data online.
8 0
3 years ago
Read 2 more answers
Other questions:
  • Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are l
    6·1 answer
  • Municipal general obligation bonds are ____. municipal revenue bonds are ____.
    10·1 answer
  • The term used to describe the degree to which tasks in an organization are subdivided into separate jobs is called ________.
    9·1 answer
  • Select the correct answer.
    7·1 answer
  • Which of the following statements is NOT correct? Select one: a. After a 3-for-1 stock split, a company's price per share should
    12·2 answers
  • Amazon creates many utilities for its customers, but perhaps the most valuable utility for consumers is ________, the utility cr
    7·1 answer
  • Which of the following statement is true? a. ​The demand for puma shoes is more elastic than the demand for shoes b. ​The demand
    12·1 answer
  • HURRY IM TIMED. A BLANK
    14·2 answers
  • Sacajawea Mercantile Co. uses the gross method for recording sales discounts. The following data were extracted from the account
    11·1 answer
  • So you them the answer you submit must be the d operators; they are pald $8. 10 an hour each and work 40 hours a week and 52 wee
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!