Ask question

Ask question

All categories

anzhelika [568]

3 years ago

10

Consider a 7-year bond with a 9% coupon and a yield to maturity of 12%. If interest rates remain constant, one year from now the

price of this bond will be _________.

1 answer:

Llana [10]3 years ago

5 0

Answer:

(C) Higher.

Explanation:

The computation of the present value in both the cases are as follows:

In the first case

Given that

Assume the par value i.e. future value be $1,000

PMT = $1,000 × 9% = $90

RATE = 9%

NPER = 7

The formula is shown below

=-PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $863.09

In the second case

Given that

Assume the par value i.e. future value be $1,000

PMT = $1,000 × 9% = $90

RATE = 9%

NPER = 6

The formula is shown below

=-PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $876.66

So as we can see that the price of the bond would increased

You might be interested in

How much would Keith have in his account after three years if he started with $200 and earns 2 percent interest, compounding ann

padilas [110]

212.24 would be your answer. 12.24 is just how much he makes off interest, not the total amount. 200 is what he started with. And 400 is just way to high of a number.

3 0

3 years ago

Read 2 more answers

Which of the following information you may obtain from a client is the best example of qualitative information?A)Whether he has

Oksanka [162]

The amount of his monthly net cash flow is the best example of qualitative information

The choice usefulness, decision model approach to accounting theory plays a significant supportive role in the utilization of qualitative traits or qualities required for information. The attributes that make the data supplied in financial statements valuable to users are referred to as qualitative qualities.

Fundamental qualitative traits that are desired in accounting information are produced by the demand for accounting information from investors, lenders, creditors, etc. Accounting information has six distinct qualitative traits.

To lean more about qualitative refer here:

brainly.com/question/28483241

#SPJ4

6 0

1 year ago

The result of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions was to:____

postnew [5]

Answer: d. Make bribery of foreign officials a criminal offense but not consider facilitating payments a criminal offense.

Explanation:

In December 1997, signatories accounting for around 70% of World Trade adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions which stated that countries must install Legislative laws that would prohibit the bribing of foreign officials as well as strict penalties for parties who engage in such. This was done to ensure that the playing field was level so to speak instead of one company getting special treatment because they paid for it.

One concern however was that the Convention did not consider Facilitating Payments a criminal offence which means that it could be used as a bypass for the bribery of foreign officials to still happen.

8 0

3 years ago

Which of the following statements about the idea that people are rational is correct? A. The idea assumes that consumers and fi

Maurinko [17]

Answer:

A. Consumers and firms use all available information as they act to achieve their goals

Explanation:

Information is a value, maybe the most important. It´s also scarce and expensive: business pay fortunes to smart men.

And the most worthy information is the one that allows a person to predict the futuro. For instance, who knows what will be the price of oil in one year.

Usually available information is not enough, people cannot acces to a better option, therefore mistakes are made, even throught and after "rational" reasoning. So, people act "rationally", in spite of goal is not always achieved.

7 0

3 years ago

HELPPP ASAP!!!!!!!!!!! PLSSSSSSSSS

siniylev [52]

Answer: B. Offering promotions C. By advertising D. Cultivating brand loyalty

Explanation:

8 0

3 years ago

Read 2 more answers