Answer:
Face Value of the Bond = 40000
Effective Interest = 4%
Coupon rate = 4%
Years to Maturity = 4
Quarterly Coupon rate = 1%
No. of compounding periods = 16
Present Value of Face (40000*.85282) $34,112.85
Present Value of Interest Payments (800*14.7179) <u>$5,887.15</u>
Total $40,000.00
Face Value of Bond <u>$40,000.00</u>
Initial Amount of Discount/(Premium) <u>$0.00 </u>
Note: As the bonds are issued at par, there is premium or discount.
Answer:
Rise; More attractive; More; Less; Rise
Explanation:
Suppose that the federal budget deficit increases.
So, there is a need to borrow funds and this will increase the government borrowings. The higher government borrowings will lead to cause the interest rate to rise.
In an open economy, the buyers in the foreign countries are buying more U.S bonds as they will receive higher rate of return from investing in bonds. Hence, the U.S bonds are becoming more attractive to the foreign buyers because of the higher interest rate.
This will reduce the value of U.S exports, hence, the trade deficit (Value of imports - Value of exports) will rise further.
A more specific goal for Kate would be to respect her younger sister, adore her more, and help her when times are rough.
Answer:
D. Both A and C
Explanation:
Items that are more useful and/or more rare, result in higher prices (and if both are true, even higher prices). If an item is rare but useless, the price would be lower. If an item is useful and not rare (think batteries or paper towels) the price lowers.
Answer:
A. The trade-off a firm faces when using retained earnings or borrowed funds is the same.
Explanation:
- A trade-off is based on the situational decisions that usually involve the loss of quality and a property that is set or designed to give a return in the other aspects.
- As one part has to increase and the other has to decrease. The trade-off is commonly expressed as in the terms of opportunity costs which states the loss of the best alternative.
