Solution-What generalization can be drawn from the

What generalization can be drawn from the completed table

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Reference no: EM132135725

Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $900.

a. In the 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 below or the bond price at each of the interest yields shown.

Bond price Interest Yield,%

$ 8,500

$ 9.47%

$ 10,500

$ 11,500

$ 6.67%

b. What generalization can be drawn from the completed table?

Bond prices and interest rates are not related.
Bond prices and interest rates are directly related.
Bond prices and interest rates are inversely related.
There is insufficient data to make a generalization.

Reference no: EM132135725

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What generalization can be drawn from the completed table

Reference no: EM132135725

Reference no: EM132135725

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