Compute the percentage change in the price of the consol

Assignment Help Business Economics

Reference no: EM131198584

You are considering purchasing a consol that promises annual payments of $4. a. If the current interest rate is 5 percent, what is the price of the consol?b. You are concerned that the interest rate may rise to 6 percent. Compute the percentage change in the price of the consol and the percentage change in the interest rate. Compare them.Your investment horizon is one year. You purchase the consol when the interest rate is 5 percent and sell it a year later, following a rise in the interest rate to 6 percent. What is your holding period return?

Reference no: EM131198584

Questions Cloud

Describe how the behavior of individual team members : In addition, describe the key processes you would follow when managing the project schedule including how much oversight each project team member may require, again based on their behavior.

Promote and model inclusive behaviours : When implementing diversity across the workplace why should you promote and model inclusive behaviours?

Attention-for international business : Please read the proposal from Senator Schumer about taxing on overseas customer calls (http://www.observer-review.com/schumer-wants-tax-on-outsourced-calls-cms-1407). Please present and discuss at least two reasons to support his proposal and two..

Calculate the first three energy levels for an electron : Calculate the first three energy levels for an electron in a quantum well of width 12.5 nm with infinite walls. The equilibrium electron and hole concentrations and the location of the Fermi level for silicon at 27 °C.

Compute the percentage change in the price of the consol : You are considering purchasing a consol that promises annual payments of $4. a. If the current interest rate is 5 percent, what is the price of the consol?b. You are concerned that the interest rate may rise to 6 percent. Compute the percentage chang..

Problem regarding the business planning : 1. Select a new business opportunity that you may have been pondering. Compile a list of ideas for possible implementation, and determine their strengths and possible challenges that you may face.

Discuss how you would adjourn your team in a manner : Develop a "Lesson Learned" document for your organization and for your project stakeholders. This document must include what went well, what went wrong, and suggestions for improvement in future projects.

Contrast needs-based theories of motivation : Compare and contrast needs-based theories of motivation. Which offers the most value to healthcare managers? Discuss the role of thinking processes in organizational communication and problem solving. In what ways could you, as a manager, use t..

Were any favorable risks discovered : The critical path is vital to project scheduling. Think of a project with which you have been involved. Was scheduling a problem? What were some of the other unfavorable risks that presented themselves during the project?

User Account

All Pages