What is the price of the bond

Assignment Help Business Economics
Reference no: EM131037818

Suppose that a bond pays $1000 per year for this year (Current dollars) and next year. Two years from now, there is no payment, but the bond can be redeemed for its face value of $10,000

a. Assume that the interest rate is 5%. What is the price of the bond? (Please show me work)

b. Now suppose that the interest rate falls to 2%. What is the price of the bond? (Please show me work)

Reference no: EM131037818

Questions Cloud

What was the standard direct labor cost for actual output : Howard Industries' actual direct labor cost was $67,000 during the current period. Howard reported an unfavorable direct labor rate variance of $1,800 and a favorable direct labor efficiency variance of $2,900. What was the standard direct labor c..
Process for producing oranges : What are the input levels for both x1 and x2 in order to minimize the cost for the orange grower
What are the chief elements of costcos strategy : What is Costco’s business model? Is the company’s business model appealing? Why or why not? What are the chief elements of Costco’s strategy? How good is the strategy? Do you think Jim Sinegal has been an effective CEO? What grades would you give him..
Give a class presentation using on a current ongoing case : Give a class presentation using on a current ongoing case in the criminal justice system. Please summarize the entire case. (Visual aids are not mandatory but may enhance presentation) There are many examples on the web and this is the basics of w..
What is the price of the bond : a. Assume that the interest rate is 5%. What is the price of the bond? (Please show me work) b. Now suppose that the interest rate falls to 2%. What is the price of the bond? (Please show me work)
Find one piece of music that showcases high notes : Find one piece of music that showcases high notes OR low notes and explain. Most music you listen to will utilize both high and low notes, however, the piece you choose should feature one or the other more prominently. For example, you may find a son..
Prevent charging for the full value of use of federal lands : President carter aggressively tried to reduce the subsidies that the rest of America pays to mining, agricultural, logging, and energy companies when they use federal lands. why did carter’s efforts fail? What institutional/political barriers serve t..
Differences between distributive and integrative bargaining : What are the differences between the traditional and interactionist views of conflict? 14-2 What are the three types of conflict and the two loci of conflict? 14-3 What are the steps of the conflict process? 14-4 What are the differences between dist..
Create annotated bibliography with three scholarly sources : Create an annotated bibliography with three scholarly sources that you may use in your proposal to support your discussion of the problem or the solution.

Reviews

Write a Review

Business Economics Questions & Answers

  What will the monopolistic competitors average fixed cost

Suppose a monopolistic competitor and long-run equilibrium has a constant marginal cost of six dollars and faces the demand curve given in the following table: What output will the firm choose? What will the monopolistic competitor's average fixed co..

  Cost function of a single-product firm

An economist estimated that the cost function of a single-product firm is: C(Q) = 120 + 20Q + 25Q2 + 10Q3. Based on this information, determine the following: The fixed cost of producing 10 units of output. The variable cost of producing 10 units of ..

  Soft selling and adverse selection

If trying to sell a new accounting system that will reduce cost by 10%. Instead of pricing the product you give the cost as 50% of their cost savings. Describe the information assymetry and adverse selection problem and why soft selling is successful..

  Qsubmit a 250- to 300-word response addressing two of the

q.submit a 250- to 300-word response addressing two of the following labor scenarios in the new housing marketa new law

  Has brody committed the tort of negligence

Business Law: In the movie Jaws, the Mayor of Amity and a few other men try to persuade Chief Brody not to close the town’s beaches. If the chief keeps the beaches open and a swimmer is injured or killed because Brody failed to warn swimmers about th..

  Which is a characteristic of a binomial experiment

which of following is a characteristic of a binomial experiment. A. at least 2 outcomes are possible b. probability changes from trial to trial c. trials are independent d. None of these alternatives is correct.

  Real rate of return on investment

Suppose Jean Splicer, an investor, buys $300,000 of shares of stock in a diversified bundle of Bio-tech firms and exactly one year later sells those shares for $315,000. What was Jean’s real rate of return on this investment?

  What are the factor markets like for the automobile industry

What are the factor markets like for the automobile industry? What global pressures does the automobile industry face? Foreign competition?

  What is his tvom in percent

While negotiating the future amount, Wylie notes that he would be willing to take no less than $5,700 if he has to wait a year. What is his TVOM in percent?

  What should happen to the share price

In terms of the shareholder wealth maximization model, if the expected future profits of a firm are cut in half, what should happen to the share price?

  Sales director for an industrial supplies firm has collected

The sales director for an industrial supplies firm has collected information describing the performance also personal characteristics of 80 members of her sales force.

  What are the advantages and disadvantages of sourcing

What are the advantages and disadvantages of sourcing from China as opposed to India? What types of products or services are best suited for sourcing from India versus China? Why?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd