Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $800 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 Instructions: Enter your responses in the gray-shaded cells. For bond prices, round your answers to the nearest dollar For interest yields, enter your answer as a percentage rounded to one decimal place. Bond Price Interest Yield, % $8,000 8.9% $10,000 $11,000 62% b. What generalization can be drawn from the completed table? O Bond prices and interest rates are inversely related O There is insufficient data to make a generalization. O Bond prices and interest rates are directly related. O Bond prices and interest rates are not related.
Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $800 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 Instructions: Enter your responses in the gray-shaded cells. For bond prices, round your answers to the nearest dollar For interest yields, enter your answer as a percentage rounded to one decimal place. Bond Price Interest Yield, % $8,000 8.9% $10,000 $11,000 62% b. What generalization can be drawn from the completed table? O Bond prices and interest rates are inversely related O There is insufficient data to make a generalization. O Bond prices and interest rates are directly related. O Bond prices and interest rates are not related.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance
Section: Chapter Questions
Problem 13PAE
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![Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $800
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
Instructions: Enter your responses in the gray-shaded cells. For bond prices, round your answers to the nearest dollar For interest
yields, enter your answer as a percentage rounded to one decimal place.
Bond Price
Interest Yield, %
$8,000
8.9%
$10,000
$11,000
62%
b. What generalization can be drawn from the completed table?
O Bond prices and interest rates are inversely related
O There is insufficient data to make a generalization.
O Bond prices and interest rates are directly related.
O Bond prices and interest rates are not related.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5803693e-1195-4c4c-b050-7e94a688b618%2F1509893a-8228-4e7c-8c01-12f521506c00%2Ftwhiuc.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $800
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
Instructions: Enter your responses in the gray-shaded cells. For bond prices, round your answers to the nearest dollar For interest
yields, enter your answer as a percentage rounded to one decimal place.
Bond Price
Interest Yield, %
$8,000
8.9%
$10,000
$11,000
62%
b. What generalization can be drawn from the completed table?
O Bond prices and interest rates are inversely related
O There is insufficient data to make a generalization.
O Bond prices and interest rates are directly related.
O Bond prices and interest rates are not related.
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