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bezimeni [28]
3 years ago
12

Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $800.a. In th

e table provided below, calculate and enter either the interest rate that the bond would yield to a bond buyer at each of the bond prices listed or the bond price at each of the interest yields shown.Instructions: Enter your answers in the gray-shaded cells. For bond prices, round your answers to the nearest hundred dollars. For interest yields, round your answers to 2 decimal places.b. What generalization can you draw from the completed table?
Social Studies
1 answer:
jekas [21]3 years ago
7 0

1. The calculation of the interest rates and bond prices are as follows:

Bond Price Interest Yield, %      Calculations

$ 8,000           10.00%               10% ($800/$8,000 x 100)

$ 9,000            8.90%         $9,000 ($800/8.9%)

$10,000            8.00%                8% ($800/$10,000 x 100)

$12,903             6.2%                   $12,903 ($800/6.2%)

2. The generalization drawn from the completed table is <em>A. </em><em>Bond price</em><em> and </em><em>interest rate</em><em> are </em><u><em>inversely related.</em></u>

<em />

The generalization about the <em>relationship between bond price and interest rate</em> is not that bond price and interest rate:

  • <em>B. Are not related </em>
  • <em>C. Are directly related </em>
  • <em>D. No sufficient data for generalization.</em>

<em />

Thus, bond price and interest rate are<em> </em><u><em>inversely related</em></u><u>.</u>

Learn more: brainly.com/question/24922696

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