Answer:
1. How is a bond like an IOU?
A bond is an IOU because it is actually a type of IOU. A bond is in essence a security in which the bond issuer promises to pay the bondholder the full value of the bond at maturity, plus interest payments (coupons) that can be paid either periodically, or at maturity as well.
2. Why is an investment grade bond is considered a “safe” investment?
Investment grade bonds are those bonds that have a rating that is considered "safe". This rating is provided by agencies such as Standard and Poors or Moody's. It is the credibility behind these agencies that makes a bond with that type of rating a safe investment.
3. How can an investor make money by buying a bond?
The investor makes money because he or she obtains the full value of the bond at maturity plus interest (coupon payments).
Bondholders also have priority over stockholders in case of bankruptcy, so a bond is in many cases a safer investment than a stock.
4. Would you recommend your Stock Market Game team include a bond in your portfolio? Why, why not?
Yes, bonds should be included because they are one of the two main types of securities, the other being stocks precisely. Companies often have to take the decision to finance their operations either with bonds or stocks, or a combination of the two, so if the game includes bonds, it also becomes more realistic.
Answer:
Difference = $9773.02
Explanation:
An annuity is a series of cash flows or payments that are of constant amount, occur after equal intervals of time and are for a limited and defined period of time. Thus, the winnings from lottery are an annuity as they pay a fixed amount $11300 every year for 21 years.
The annuity can be of two types namely ordinary annuity and annuity due. In ordinary annuity the cash flows occur at the end of the period and in annuity due, the cash flows occur at the beginning of the period. When we calculate the present value of these cash flows, it is understood that the present value of annuity due is greater than the present value of ordinary annuity.
The formulas for the present value of both ordinary annuity and annuity due are attached.
In the formula, R is the annuity payment or cash flow and i is the relevant interest rate and n is the number of years or periods.
PV of annuity ordinary = 11300 * [ (1 - (1+0.1)^-21) / 0.1 ]
PV of ordinary annuity = $97730.24548 rounded off to $97730.25
PV of annuity due = 11300 * [ (1 - (1+0.1)^-21) / 0.1 ] * (1+0.1)
PV of annuity due = $107503.27
Difference = 107503.27 - 97730.25
Difference = $9773.02
Answer:
Mexico export 1 unit of cloth and import 2 unit of food
Explanation:
given data
Mexico’s cost producing 1 unit of food = 3 units of clothing
US cost producing 1 unit of food = 0.5 units of clothing
Trade ratio = 1:1
to find out
How beneficial would it be for Mexico
solution
as given in question we know that Mexico opportunity cost of producing food is lower in the US
so here United States will produce food and Mexico will produce cloth
and trade ratio is 1:1 so that Mexico has export 1 unit of cloth and can import 1 unit of food
and
when the trade ratio is 1 unit of clothing for every 2 unit of food
Mexico export 1 unit of cloth and import 2 unit of food
so as that Mexico will gains more by later trade ratio
He should <span>sell 600 copies of the deluxe version at $100 each</span>
Answer:
Title VII of the Civil Rights Act
Explanation:
