Question
In: Economics
1) Suppose a bond with no expiration date has a face value of $10,000 and annually...
1) Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $800. In the table provided, calculate and enter either the interest rate that the bond would yield to a bond buyer at each of the bond prices listed or the bond price at each of the interest yields shown. Round your answer to the nearest thousandth. What generalization can be drawn from the completed table?
2) Assume that Jimmy Cash has $2,000 in his checking account at Folsom Bank and uses his checking account card to withdraw $200 of cash from the bank’s ATM machine. By what dollar amount did the M1 money supply change as a result of this single, isolated transaction?
3. Suppose that Serendipity Bank has excess reserves of $8,000 and checkable deposits of $150,000. If the reserve ratio is 20 percent, what is the size of the bank’s actual reserves?
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Suppose a bond with no expiration date has a face value of $10,000 and annually pays...
Suppose a bond with no expiration date has a face value of $10,000 and annually pays $800 in fixed interest
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 or the bond price at each of the interest yields shown.
Suppose a bond with no expiration date has a face value of $10,000 and annually pays...
Suppose a bond with no expiration date has a face value of
$10,000 and annually pays a fixed amount of interest of $950.
Compute and enter in the spaces provided in the table below either
the interest rate that the bond would yield to a bond buyer at each
of the bond prices listed or the bond price at each of the interest
yields shown.
Instructions: For bond prices, round to the nearest dollar.
For interest rate, round your answer...
Suppose that you want to buy a bond with a face value of $10,000. The bond...
Suppose that you want to buy a bond with a face value of
$10,000. The bond has annual coupon payments at a 20% interest on
its face value each year. If you want a yield to maturity of 16%,
what will be the maximum price of the bond? (Select the closest
answer) (The bond matures in 10 years and the first payment will be
received in one year.)
A. $23589.1
B. $11933.3
C. $10946.7
D. $12369.8
A bond very recently purchased for $9,000 has a face value of $10,000 and a bond...
A bond very recently purchased for $9,000 has a face value of
$10,000 and a bond interest rate of 10% per year payable
semiannually. The bond is due (matures) in 3 years. The company
that issued the bond is contemplating a liquidity problem in 3
years and has just advised all bondholders that if they will keep
their bonds for an additional 2 years past the original due date,
the bond interest rate for the additional two years will be...
A mortgage bond with face value of $10,000 has a bond interest rate of 8% per...
A mortgage bond with face value of $10,000 has a bond interest
rate of 8% per year payable quarterly. What is the amount of the
bond interest (I) or interest payment every quarter?
A bond has a face value of $1,000, a coupon of 5% paid annually, a maturity...
A bond has a face value of $1,000, a coupon of 5% paid annually,
a maturity of 22 years, and a yield to maturity of 9%. (1) What is
the bond price today and (2) what rate of return will be earned by
an investor who purchases the bond today and holds it for 1 year if
the bond’s yield to maturity at the end of the year is 6%?
A.$622.3 ; 41.79 %
B.$882.36 ; 41.79 %
C.$882.36 ;...
A bond has a face value of $1,000, a coupon of 4% paid annually, a maturity...
A bond has a face value of $1,000, a coupon of 4% paid annually,
a maturity of 28 years, and a yield to maturity of 9%. (1) What is
the bond price today and (2) what rate of return will be earned by
an investor who purchases the bond today and holds it for 1 year if
the bond’s yield to maturity at the end of the year is 7%?
a) $640.4 ; 29.58 %
b) $640.4 ; 37.68 %...
A bond has a face value of $1,000, a coupon of 4% paid annually, a maturity...
A bond has a face value of $1,000, a coupon of 4% paid annually,
a maturity of 33 years, and a yield to maturity of 7%. What rate of
return will be earned by an investor who purchases the bond for
$617.39 and holds it for 1 year if the bond’s yield to maturity at
the end of the year is 8%?
The answer -15.82% is being marked as wrong please help!
Consider a bond that has a $10,000 face value and a coupon rate of 4%. Show...
Consider a bond that has a $10,000 face value and a coupon rate
of 4%.
Show the expression to find the price and find the price in each
of the following cases:
1. The bond has one year to maturity and the interest rate is
3%.
2. The bond has one year to maturity and the interest rate is
5%.
3. The bond has two years to maturity and the interest rate is
3%.
4. The bond has two years...
A corporate bond has a face value of $10,000, a coupon rate of interest of 8.25%...
A corporate bond has a face value of $10,000, a coupon rate of
interest of 8.25% per annum, payable semi-annually, and six and a
half years remaining to maturity. The market interest rate for
bonds of similar risk and maturity is currently 9.5% per annum,
what is the present value of the bond?
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