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melisa1 [442]
3 years ago
12

An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of in

terest is 5%, what is the current market value of the bond
Business
1 answer:
ra1l [238]3 years ago
6 0

Answer:

Bond Price​= $846.3

Explanation:

Giving the following information:

YTM= 0.05

Maturity= 15*2= 30 semesters

Par value= $1,000

Coupon= $40

<u>To calculate the price of the bond, we need to use the following formula:</u>

<u></u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 40*{[1 - (1.05^-30)] / 0.05} + [1,000 / (1.05^30)]

Bond Price​= 614.90 + 231.38

Bond Price​= $846.3

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Demand"" is a series of prices and the related quantities that consumers are willing and able to buy at a particular ___________
Nonamiya [84]

Answer:

given price in a given time period

Explanation:

Demand is the quantity of a good or service that consumers are willing and able to buy at a given price in a given time period. Each of us has an individual demand for particular goods and services and our demand at each price reflects the value that we place on a product, linked usually to the enjoyment or usefulness that we expect from consuming it. Law of demand  states that If the price of something goes up, people are going to buy less of it.The higher price leads to a lower quantity demanded and that a lower price leads to a higher quantity demanded.  Demand is based on needs and wants a consumer may be able to differentiate between a need and a want, but from an economist’s perspective they are the same thing. Demand is also based on ability to pay. If you cannot pay, you have no effective demand. What a buyer pays for a unit of the specific good or service is called price. The total number of units purchased at that price is called the quantity demanded. An increase in the price of a good or service almost always decreases the quantity demanded of that good or service. Conversely, a decrease in price will increase the quantity demanded.

7 0
3 years ago
What should you expect to get from your insurance company in exchange for your premium?
Sergeu [11.5K]

Answer:

see below

Explanation:

Premiums are the regular payments the insured pays to the insurance company for insurance coverage. By paying premiums, the insurance company agrees to compensate the insured for any financial loss resulting from the risk covered by the insurance contract.

Premiums are the cost of insurance.  The customer pays premiums while the insurances undertake the risk stated in the policy documents. Should the customer suffer damages, injuries, or financial loss, the insurance companies compensate the customer as per the terms stated in the insurance contract.

5 0
3 years ago
What is the discount yield, bond equivalent yield, and effective annual return on a $3 million commercial paper issue that curre
aleksklad [387]

Answer:

(a) 6.206%

(b) 6.54%

(c) 6.58%

Explanation:

Given that,

Commercial paper value = $3 million

Currently selling at 97.50 percent of its face value.

Days from maturity = 145

(a) Discount yield:

= \frac{(Face\ value - Current\ price)}{Face\ value}\times\frac{360}{Days\ in\ maturity}

= \frac{(100 - 97.50)}{100}\times\frac{360}{145}

= 0.025 × 2.4827

= 0.06206 or 6.206%

(b) Bond equivalent yield:

= \frac{(Face\ value - Current\ price)}{Current\ price}\times\frac{365}{Days\ in\ maturity}

= \frac{(100 - 97.50)}{97.50}\times\frac{365}{145}

= 0.026 × 2.52

= 0.0654 or 6.54%

(c) Effective annual return:

Future value = Present value × (1+r)^{n}

$100 = $97.50 × (1+r)^{\frac{145}{365}}

(\frac{100}{97.50})^{\frac{365}{145}} = 1+r

1.0658 = 1 + r

0.0658 or 6.58% = r

6 0
3 years ago
Marci is 11 years old. She walks her neighbors' dogs for cash. Her income from this service is probably part of the informal eco
Vikki [24]

Her income from this service is probably part of the informal economy is true.

An informal income (informal region or gray economic system)is the part of any economic system that is neither taxed nor monitored by using any shape of the presidency.

Although the informal region makes up a widespread portion of the economies in developing nations, it's miles every now and then stigmatized as difficult and unmanageable.

However, the informal region affords important economic possibilities for the negative and has been increasing swiftly because the 1960s. Integrating the informal financial system into the formal quarter is a vital coverage assignment.

In lots of cases, not like the formal economic system, sports of the informal economic system are not blanketed in a rustic's gross national product (GNP) or gross home product (GDP).

<em>Your question is incomplete. Please read below to find the missing content.</em>

Marci is 11 years old. She walks her neighbors' dogs for cash. Her income from this service is probably part of the informal economy.

True

false

Learn more about income here: brainly.com/question/26316390

#SPJ4

5 0
2 years ago
Most developing countries do not have access to the technology available in developed nations, but these developing nations need
swat32

Answer: c. resource-transfer effects

Explanation:

Foreign Direct Investment refers to when a company from a foreign country actually owns a business in the local country or at least controls a significant portion of it.

If the foreign country is a Developed nation and the local country is a Developing nation, the foreign company would bring with it resources to build their local investment and make it more competitive.

Resources such as capital and technology would be brought in that can then be used by the Developing country to its own benefit.

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3 years ago
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