If interest rates decline, which would you rather beholding, long-term bonds or short-term bonds? Why?Which type of bond has the greater interest-rate risk?

Q: Suppose that people in France decide to permanentlyincrease their savings rate. Predict what will…

A: ANS If the demand (DD) for bonds decreases then more interest will be offered so that the DD for…

Q: 1) Assuming that the current interest rate is 3 percent, compute the present value of a 5-year, 5…

A: The current interest rate is 3%.  The coupon rate is 5%.  The face value of a bond is $1000.  Number…

Q: Which of the following investment strategies involves generating a higher expected rate of return…

A: Through taking more risk the return will also increase too much or decrease to much.

Q: Bonds are priced at: a. Present value of future cash flows at yield b.Future value of coupon…

A: A bond is an instrument to raise money by borrowing from investors. It is used by the government and…

Q: If the quantity of bonds demanded exceeds the quantity of bonds supplied, bond prices: a. Will rise…

A: If the quantity of bonds demanded exceeds the quantity of bonds supplied, bond prices would rise and…

Q: When the safe investments that pension funds usually rely on are paying less than 1 percent, then…

A: Pension funds are those funds that need to kept aside by the employer to be able to be given at the…

Q: c. Small businesses use these to raise funds for investment. Loan | Stock | Bond d. This is also…

A: Loan: A loan is an agreement between borrower and lender that implies the borrower is borrowing a…

Q: Bond A pays $8,000 in 20 years. Bond B pays $8,000in 40 years. (To keep things simple, assume that…

A: The interest rate is given as 3.5% The present value of the bonds can be calculated from the…

Q: 3. What is the yield to maturity of a 15% coupon bond selling for $900 that has a face value of…

A: Yield to maturity (YTM) refers to the internal rate of return (IRR) an investor will receive on a…

Q: 3. Paul Davies owns a British Consul, a security which pays the equivalent of $2000 U.S. each year…

A: A financial concept known as the present value (PV) depicts the current worth of expected future…

Q: Explain why a mortgage-backed security becomes riskier when the values of the underlying houses…

A: Mortgage-backed securities are more risky. The cost of borrowing is represented by interest…

Q: Which of the following statements is correct regarding bonds? A. An increase in market interest…

A: The bond market is a financial marketplace where debt securities are traded. These debt securities,…

Q: Solve all this question......you will not solve all questions then I will give you down?? upvote....

A: The objective of the question is to determine which of the given bonds has the highest yield to…

Q: Please show work

A: The amount deposited 5 years ago is $1,000 and the amount deposited one year ago is $2,000.The…

Q: The benefit of diversification when constructing a portfolio is that it can reduce what?

A: Diversification(D) is a strategy to minimize the risk by combining variety of investments(I) within…

Q: what does it mean to say that the optimal amount of investment in a risky asset is independent of…

A: The phrase in question pertains to investment theory and the decision-making process regarding the…

Q: Discuss any three factors that determine Interest Rates?

A: Interest rate is the rate at which the money is traded . Money is like a normal goods an interest…

Q: Use the model of supply and demand for bonds to determine the impact on bond prices and yields of…

A: The demand for bonds  depends upon;WealthExpected relative returnLiquidityRiskThere can be a change…

Q: Annuity Suppose that you are thinking of buying a car that yields a rental of $5,000 each year for 3…

A: To determine how much you should be willing to pay for the car, we can calculate the present value…