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alexgriva [62]
3 years ago
9

Bond A sells at $975. Bond B sells at $1010. Both bonds have a coupon rate of 4%. All else equal, which bond has more interest r

ate risk?
Business
1 answer:
Softa [21]3 years ago
7 0

Answer:

Bond A

Explanation:

Interest rate risk is the likelihood of loss to bondholders emanating from an increase in a bond's market interest rate which is also the yield to maturity.

However, a bond is issued at a premium when its market interest rate is lower than the coupon rate and at a discount when the reverse is the case.

In this instance, bond A was issued at a discount  while B was issued at a premium, hence, the market interest rate of Bond A is higher and it has a higher interest rate risk due to its yield to maturity which made it trade at a discount to the face value of $1000 per bond

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Dizzy Amusement Park is open from 8:00 am till midnight every day of the year. Dizzy charges its patrons a daily entrance fee of
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Answer:

C. Step variable cost

Explanation:

Fixed costs are those costs which are incurred anyways irrespective of the level of operation of a business or the volume of activity. For example rent of factory is a fixed cost which has to be incurred regardless of the production level.

Variable costs are those costs which vary with the level of production. e.g labor cost.

In this case, a T- shirt is given to every 100th customer.  This kind of cost is step cost at the level of 100th customer. The number of T-shirts in a day would depend upon the no of patrons arriving each day i.e variable.

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6 0
4 years ago
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Which of the following ethical theories is adopted by a company that strives to act as ethically as possible, even at the expens
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Answer:

c. The moral minimum theory

Explanation:

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I hope you find this information useful and interesting! Good luck!

7 0
3 years ago
Consulting immediately paid $500 cash for utilities for the current month. Given the choices below, determine the general journa
Andru [333]

Answer:

a. Utilities Expense 500

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Explanation:

Given: Consulting immediately paid $500 cash for utilities.

As $500 cash been paid for utility expenses.

We know the golden rule of accounting transaction:

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Therefore, Debit all expense and losses and credit what goes out of business.

Journal Entry of the transaction:

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     Credit cash account--- $500

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4 years ago
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