Q: Economists assert that financial markets serve the function of efficiently allocating capital. What…
A: The stock market, bond market, currency market, and derivatives market are just a few examples of…
Q: Draw the demandand supply curves forthe bond market, andidentify the equilibrium interest rate.
A: The equilibrium interest rates for bonds can be determined when demand for and supply of bonds are…
Q: If the supply of bonds falls, then bond prices O will generally rise O interest rates will generally…
A: Bond price is determined by the intersection of demand(for bonds) and supply(for bonds). The supply…
Q: Deliberate specifally how and through which channelss the interest rate affects (negatively or…
A: Interest rates can impact the economic activities in different ways. When the interest rates are…
Q: ______________ is a method of measuring the value of a section of the bond
A: In economic, bond market is referred to the place where exchange of bonds take place.
Q: ate paid on similar corporate bonds has decreased to a current rate of 6%/yr/semi (this would be i –…
A: The market value represents the value of a company according to the stock market. It is the price an…
Q: at is quantitative easing in the UK? (What's is yield on th
A: Quantitative easing is a form of unconventional monetary policy where the central bank purchases…
Q: What is current yield?
A: Investments in the economy are important for the development, progress, and growth of economies…
Q: Draw the Yield curve for U.S. government bonds as it was on February 5th, 2020. Explain what is a…
A: The yield curve shows the yield to maturity. The yield derived for a maturity period is depicted in…
Q: Answer the question based on the following information for a bond having no expiration date: bond…
A: An unique kind of bond that doesn't have a maturity date is a perpetual bond. Theoretically,…
Q: what is the formula for the rate on long-term Treasury bonds?
A: Suppose:Amount paid for bond=$10,000Face value=$15,000Counpon rate=$2000
Q: The interest rate for a bond is always equal to its yield to maturity
A: The interest rate can be defined as the amount of interest which is measured as a percentage of the…
Q: Which is TRUE about inflation and interest rates? * a. None of the choices. b. The inflation…
A: Which is TRUE about inflation and interest rates? *
Q: In a country Macroland, the government borrows at 5% for 1-year maturity. However, the Central Bank…
A: GIVEN In a country Macroland, the government borrows at 5% for 1-year maturity. However, the…
Q: which of the following bonds should you buy when interests rates are expected to go up? a) 5 year ,…
A: There is a more prominent probability that interest rate will rise (and subsequently adversely…
Q: How change in bond yield affect the economy?( 2000 words)
A: Monetary policy, specifically the direction of interest rates, has a significant impact on bond…
Q: A bond has a modified duration of 8 and convexity of 20. Calculate the 9% price ? from a 5% decline…
A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…
Q: How do interest rates affect bond yield and bond prices.
A: Bonds are a form of financial security in case of which the issuer owes the holder a debt. Borrowers…
Q: If a firm earns $375 billion in profits for the year and they retain $218 billion, how much do they…
A: Dividends means that amount which company pay to its stockholder after deduction of its cost and…
Q: Explain the term “riding the yield curve” in the process of investing of surplus cash. (Note: yield…
A: An financial technique in which one purchases a long-term bond and then sells it before it matures.…
Q: From a firms point of view how is bond similar to a bank loan how are they different
A: Bonds are a form of debt protection. It is a method for a business to collect funds by selling what…
Q: Draw the yield curve for u.s. government bonds as it was on february 5th 2020
A: Data for the calculation was taken from country U department of treasury official site, So the yield…
Q: Discuss how the concepts of pure security,short selling and no arbitrage profit help establish and…
A: Capital market equilibrium requires that market prices be set so that supply equals demand for each…
Q: Calculate the bond yield rate % for a bond with an actual interest payment of $200 and a market…
A: Bond yield is the return gain from the coupon payments of the bond to the inventor.
Q: Why are bonds somewhat risky to buy, even though they make predetermined payments based on a fixed…
A: Financial economics deals with the financial markets, their operations and functions, and the…
Q: You own a 6%bond and want to sell it in a yearl Di you hope that interest rates rise or fall?…
A: there are a lot of signals where we can say that we have to sell the bond.
Q: If a firm earns $500 million in profits for the year and they retain $175 million, how much do they…
A: Retained earnings are those earnings that are earned by the firm but have not been returned to…
Q: IV. Compute the two-year nominal interest rate using the exact formula and the approximation formula…
A:
Q: The yield-to-maturity of a discount bond is always negative. True False
A: In a market, bonds the the monetary instruments that are issued by the firms and demanded by the…
Q: How would a financial manager's role in a corporation increase/decrease if the rate of inflation in…
A: Inflation has its own pros and cons. Consumers are worse-off with inflation but investors can enjoy…
Q: What are the factors determining the changes in interest price and in what way? Analyze on a…
A: There exists positive relationship between money demand and interest price. If the money demand…
Q: Explain why you agree or disagree with the following statements: A. “A bond issued by a corporation…
A: The word "risk free" refers to assets that are deemed to be sufficiently stable that investors may…
Q: True or False: With a discount bond, the return on thebond is equal to the rate of capital gain.
A: Financial economics deals with all the instruments which are used in several markets for speculative…
Q: The price of a bond with no expiration date is originally $1,000 and has a fixed annual interest…
A: Given Face value of bond = 1000 Annual interest payment = 150 $ Interest rate = 150 / 1000 * 100 =…
Q: What are the requirements that a company must have, in order to insert in Borsa Italiana stock…
A: Companies of all sizes can use the Borsa Italiana stock exchange to generate considerable funds to…
Q: Suppose you purchase a $10,000 face value zero-coupon bond and hold it to maturity, a term of 10…
A: Face value = 10000 $ Time = 10 Years Current price = 8072 YTM = (10000 / 8072)^1/10 – 1 * 100 = 2.16…
Q: What is the current price of a $1,000 discount bond that matures in 5 years if the yield to maturity…
A: As it is given in the question that Time n=5 YTMR = 5% current price =$1,000
Q: According to the portfolio theroies of money deman , which of the following statement is true? an…
A: According to Portfolio theories of money demand, an individual's wealth is held in the form of money…
Q: If interest rates decline, which would you rather beholding, long-term bonds or short-term bonds?…
A: Long-term bonds come with a maturity span of 10 years to 30 years. In general, such bonds pay a…
Q: The remarkable thing about the events described in the article is that the yield on the 3-month…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Why does longer-term bonds fluctuate more when interest rate change, than does shorter-term bonds
A: An investor's debt to a borrower is represented by a bond, which is a fixed-income investment. A…
Q: Suppose that CNN headline news reports that a bond price has "plunged" (i.e. decreased) due to…
A: Yield to maturity (YTM) can be defined as the total return expected on a bond assuming the bond is…
Q: Ellah buys a discount bond for $920. When the bond matures, she redeems it for its face value of…
A: Buying price of bond = $920 Future value = $1000
Q: Which of the following would both make the interest rate on a bond higher than otherwise? a.…
A: Bonds are defined as long term debt which is exclusively been provided by the company to generate…
Q: Why is the relationship between price and yield negative? a. Because investors reward higher…
A: The formula for bond price calculation is given by: Bond Price = ∑i[ C/(1+r)n + F/(1+r)n] where i…
Q: What refers to the cost of borrowing money or the amount earned by a unit principal per unit time?…
A: Investment is any asset in which an investor invests in order to earn profit expecting increase in…
Q: Q.No.03. Differentiate b/w Bond & Contract.
A: We will only respond to the first of your questions since you asked several questions under a single…
9. Duration is an accurate measure of the relationship between percentage changes in a
price
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- 1. discuss how agricultural insurance could help farmers improve farm activity.A company has an investment project that would cost $10 million today and yield a payoff of $15 million in 4 years (a) Should the firm undertake the project if the interest rate is 11 percent? 10 percent? 9 percent? 8 percent? (b) Can you figure out the exact cutoff for the interest rate between profitability and nonprofitability?e The following Markups are received at various steps along the chain of distribution for a jar of pasta sauce that sells at a retail price of $5.00. What does it cost the manufacturer to produce a jar of pasta sauce? Format: $X.XX Distribution Stage Manufacturer Distributor Wholesaler Retailer Markups 50% 50% 33% 40%
- 35. If you know that you can afford a $500 per month car payment for the next 48 months, the interest rate is positive and you have found a car dealer who will agree to a zero down payment you will a. Be able to afford a $25,000 car (which is more than $500x48) b. Be able to afford a $24,000 car (which is exactly $500x48) c. Be able to afford something less than a $24,000 car d. Be able to finance a more expensive car when the interest rate is highInvestors sometimes fear that a high-risk investment is especially likely to have low returns. Is this fear true? Does a high risk mean the return must be low?Customer value Is best understood as. a. The purchasing power that CUstomers benetit trom a certain product. b. The gained benefits, both monetary and nonmonetary, that custormers receve trom a product c.The degree of consumer confidence that customers benefit from the purchasing process. d. The level of customer service that custormers obtain from a company e. The customer relationship shared between a company and its stakeholders.
- please explain and provide c2. A person considers the following four criteria for buying a car. The pairwise comparison matrix of these criteria is as shown in the table below. With the AHP method, get the weight of the criteria. Safety Comfort accessories Price Safety Comfort accessories 1 1 1 2 2 1 1 1 3 2 3 1 1 2 Price 2 2 2 13-4. What is the difference between a consumer’s disposable and discretionary income?
