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
Which is a short term bond that must be paid within a year or less?
melisa1 [442]
Treasury bill
<span>It's a short-term debt backed by the U.S. government with a limit of one year, It's sold in denominations of $1,000. The maximum purchase is $5 million </span>
8 0
3 years ago
Read 2 more answers
How do i cancel my account i made because it does not work
Gre4nikov [31]

A account for here? Ask a server administer  to cancel it I guess. I can't recall anywhere where it said how to delete or discontinue my account.

7 0
4 years ago
Read 2 more answers
Basic scientific research is research that may not have immediate commercial application, but has the potential to contribute to
Studentka2010 [4]

Answer:

The correct answer is letter "A": positive externalities.

Explanation:

An Externality is a cost or benefit incurred or received by a third party who has no control over the factors that created the cost or benefit. Positive externalities occur when both at the private and social levels have a positive benefit from the consumption or production of a good.

3 0
3 years ago
Universal Containers has a block priced product, Cloud Contacts, and wants to apply a 10% premium to the product when the paymen
Eduardwww [97]

Answer:

d. SBQQ__RegularPrice__c = SBQQ__ListPrice__C * 1.1

a. SBQQ__CustomerPrice__c = SBQQ__RegularPrice__c * (1 - SBQQ__ Discount_c)

c. SBQQ__PartnerPrice__c = CustomerPrice__c * (1 - SBQQ__ PartnerDiscount_c)

b. SBQQ__NetPrice__c = SBQQ__PartnerPrice__c * (1 - SBQQ__ DistributorDiscount_c)

Explanation:

For 10% premium to be applied on a block price product, an action in a correct order should be taken. The order is as follows;

d. SBQQ__RegularPrice__c = SBQQ__ListPrice__C * 1.1

a. SBQQ__CustomerPrice__c = SBQQ__RegularPrice__c * (1 - SBQQ__ Discount_c)

c. SBQQ__PartnerPrice__c = CustomerPrice__c * (1 - SBQQ__ PartnerDiscount_c)

b. SBQQ__NetPrice__c = SBQQ__PartnerPrice__c * (1 - SBQQ__ DistributorDiscount_c)

5 0
3 years ago
An economy that is neither growing nor shrinking is said to be in a period of
Goshia [24]

an economy that is neither growing nor shrinking is said to be in a period of stagnation.

8 0
3 years ago
Other questions:
  • Which ratios help assess the firm’s ability to meet cash needs as they arise?
    8·1 answer
  • The dunder-mifflin paper company has been suffering an even greater spate of shirking by the accounting staff ever since its emp
    5·1 answer
  • Grey owns the surface rights for High Desert Ranch, which includes a house, a bunkhouse, and two barns. Industrial Mining Inc. o
    5·1 answer
  • The findings of a recent company survey at Rader Industries showed that employees are experiencing high levels of work stress. T
    14·1 answer
  • Which activity is done in Step 2 of comparison shopping?
    14·1 answer
  • In Country C, the unemployment rate among construction workers dropped from 16 percent on September 1, 1992, to 9 percent on Sep
    6·1 answer
  • When you first started your new business, you were so excited about the large volume of orders you had
    12·1 answer
  • In a __________ economy, most 4es are privately owned, but the government regulates utilities, builds roads and bridges, and pro
    5·2 answers
  • An American-style call option with six months to maturity has a strike price of $35. The underlying stock now sells for $43. The
    11·1 answer
  • Nick’s team was not making much progress on defining a new production process. Wesley was being very uncooperative. He did not a
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!