Microhard has issued a bond with the following characteristics: Par: $1,000 Time to maturity: 21 years Coupon rate: 9 percent Semiannual payments Calculate the price of this bond if the YTM is 6% (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.):
Answer:
Price of bond = $982.63
Explanation:
<em>The value of the bond is the present value (PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
</em>
Value of Bond = PV of interest + PV of RV
The value of bond for Microhard can be worked out as follows:
Step 1
PV of interest payments
Semi annul interest payment
= 9% × 1000 × 1/2
= 45
Semi-annual yield = 6%/2 = 3
% per six months
Total period to maturity (in months)
= (2 × 21) = 42 periods
PV of interest =
45 × (1- (1+0.03)^(-21)/0.03)= 693.6
Step 2
PV of Redemption Value
= 1000 × (1.03)^(-21×2)
=288.95
Price of bond
= 693.6 + 288.95
=982.63
Price of bond = $982.63
Answer:
M2 = $470 billion.
Explanation:
M2 = Currency + Money market mutual fund + Time deposits + Saving deposits
M2 = 200 billion + 10 billion + 40 billion + 220 billion
M2 = $470 billion.
M2 is a calculation of the money supply that includes all elements of M1 as well as "near money"
Answer:
true
Explanation:
true<em> </em><em>yh </em><em>no </em><em>chang</em><em>e</em><em>s </em><em>true</em><em> </em><em>all </em><em>the</em><em> way</em>
Answer:
c. fall in the short run, and fall even more in the long run.
Explanation:
The aggregate demand shifts to the left in recession or contractions, in consequence the level of prices falls. For this analysis we consider the shor-run supply curve with a positive slop.
As we know, the economy in the long run tends to equilibrium, where the the production level is fixed and equal to the potential of production of the economy. The initial reduction of prices incentives the consumption in the long run, stabilizing with the long run quantites in a minor level of prices.
In the attached image you can observe the process described previously.
Answer:
The answer is Consumer Behavior
Explanation:
Consumer Behavior is the study of individual customers, a group of people or organizations with regard to how these people and organizations purchase and dispose goods and services that are needed to satisfy their wants or needs.
This study seeks to understand how the behave in the marketplace and the reason(s) for this behavior.
The importance of understanding consumer behavior is that it can help you become more effective at marketing, advertising, product design and development, which will have the major impact of your customers.
An example can be seen when someone seeks the advice of his/her friend before purchasing a car. In this case, they may buy the car not because they like it, but because a friend recommended that car.
