The bond that has a face value of $1,000 has a duration of 10 years.
<h3>
What is a bond?</h3>
A bond is a type of security in the financial world where the issuer (debtor) owes the holder (creditor) a debt and is required, depending on the terms, to repay the bond's principal (i.e., the amount borrowed) at the bond's maturity date as well as interest (referred to as the coupon) over a predetermined period of time. The interest is typically due at regular intervals, such as every six months, once a year, and less frequently at other times. To finance long-term investments or, in the case of government bonds, to finance immediate expenses, the borrower can obtain external funds through the sale of bonds. Both bonds and stocks are considered to be forms of security, but the main distinction between the two is that (capital) stockholders have an equity stake in a company, whereas bondholders have a creditor stake.
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Answer:
Quantity, location and weather
Explanation:
The concept of the ceteris paribus, is vital in economics as in the real world, it is generally hard to isolate all the variables that are different, and might change the result or outcome.
The ceteris paribus is the simplification, which include holding other things ( both outside as well as inside the model) constant. In this situation, all variables except price and the color are held constant. In this example, such as quantity, weather and location are held constant.
To help his team achieve their stated goals, the next thing that he should ask for are each team member’s: Action plan.
<h3>Who are team member?</h3>
Team member are the people who have the same set goals and are expected to work in unity so as to accomplish or achieve their set goals.
Hence, in order for the team member to achieve their goals, the next step of action is for him to asked each team member’s their action plan.
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Answer:
$ - 1.96
Explanation:
After three months, Alice (long the contract) can buy the underlying by paying the delivery price of $40 which is $2 less than $42 the long position would have to pay if the contract was entered today.
DATA
Delivery price = $40
The three-month risk-free interest rate (with continuous compounding) =8%.
The current forward price = $42
Solution
So based on the present situation, Alice would be in $2 profit at the end of 3 months and Bob would be in $2 loss
Present value of Bob's loss (with continuous compounding) = 2\times e^{-0.08\times 0.25}
Present value of Bob's loss (with continuous compounding) = $1.96
The value of Bob's position is $ - 1.96
