1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
lora16 [44]
3 years ago
13

A $ 5000 bond with a coupon rate of 6.7​% paid semiannually has eight years to maturity and a yield to maturity of 7.8​%. If int

erest rates rise and the yield to maturity increases to 8.1​%, what will happen to the price of the​ bond?
Business
1 answer:
prohojiy [21]3 years ago
7 0

Answer:

As a result of an increase in the YTM, the price of the bond will fall $4677.19 from to $4593.67

Explanation:

The bonds are valued or priced based on the present value of annuity of interest payments and the present value of the principal. Based on the YTM of 7.8% the bonds are priced at,

coupon payment = 5000 * 0.067 *1/2  =  $167.5

Semiannual YTM = 7.8 *0.5  =  3.9%

Semi annual periods to maturity = 8 * 2  =  16 periods

Old Price = 167.5 * [( 1 - (1 + 0.039)^-16  + 5000 / (1+0.039)^16

Old Price = $4677.19

New semiannual YTM = 8.1% / 2  =  4.05%

New Price = 167.5 * [( 1 - (1+0.0405)^-16) / 0.0405] + 5000 / 1.0405^16

New Price = $4593.67

You might be interested in
Why is the statistical validity of a multiple regression design more complicated to interrogate than a bivariate design? a. Thes
Allisa [31]

Answer:

The answer is letter D.

Explanation:

Because it is harder to detect outliers.

7 0
3 years ago
When a company uses computer software to extract large amounts of data from social media platforms, it is using ______
Citrus2011 [14]
The answer is web scraping
5 0
3 years ago
The consumer decision making process is comprised of these five steps: Need recognition, Environmental Scanning, Evaluation of a
Goshia [24]

Answer:

need recognition, information search, evaluation of alternatives, purchase, and post purchase behavior

Explanation:

In simple words, A consumer refers to an individual who acquire a resource in exchange of money or some other resource, to satisfy his or her needs.

The customer decision-making process involves consumers becoming aware of and identifying their interests, gathering input about how to better meet those needs, weighing alternative possible choices, making a buying judgment as well as evaluating their investment.

5 0
3 years ago
Consider a small country that is closed to trade, so its net exports are equal to zero. The following equations describe the eco
PtichkaEL [24]

Answer:

this is government alargar effect

5 0
4 years ago
Which of the following is a contrary indicator?A) odd-lot tradingB) breadth of market and market volumeC) short-interest and the
garri49 [273]

Answer:

Short Interest and the Advance/Decline line

Explanation:

The Short Interest and the advance/descent line, also known as the AD line, is an indicator of market amplitude that gives the same weight to all the values ​​of an index or market. The advance/descent line, also known as the AD line, is an indicator of market breadth that gives the same weight to all the values ​​of an index or market.

The advance / descent line is an indicator of market breadth because it informs us of the general market movement. Similarly, when we say that it gives the same weight to all stock index values, we are saying that for the forward / down line all values ​​are equally important.

What really interests this indicator, being of market breadth, is to see if the price movement is accompanied by the movement of the indicator.

4 0
3 years ago
Other questions:
  • Both Coca Cola and Benetton are global enterprises. Conduct online research and answer the following questions: What characteris
    5·1 answer
  • Brooks Foundry in Rochester comma New York​, uses a predetermined manufacturing overhead rate to allocate overhead to individual
    15·1 answer
  • Savings account A and savings account B both offer APRs of 6%, but savings account A compounds interest semiannually, while savi
    15·1 answer
  • As an employee of new hampshire industries, kathleen has an opportunity to invest pre-tax income in an employer-sponsored retire
    14·2 answers
  • Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years
    15·1 answer
  • Define the term market system.
    14·1 answer
  • Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's
    11·1 answer
  • The prevailing marketing strategy of the ________ era was to find customers for inventories that went unsold.
    10·1 answer
  • *WILL AWARD BRAINLIEST IF CORRECT!*
    7·1 answer
  • The Balance Sheet Identity is:
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!