Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $700. 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. Instructions: Enter your answers in the gray-shaded cells. For bond prices, round your answers to the nearest hundred dollars. For interest yields, round your answers to 2 decimal places. Bond Price Interest Yield, % $8,000 7.78 $10,000 $11,000 5.38 b. What generalization can you draw from the completed table? Bond prices and interest rates are directly related. Bond prices and interest rates are not related. O Bond prices and interest rates are inversely related. O There is insufficient data to make a generalization. O O O O

Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $700. 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. Instructions: Enter your answers in the gray-shaded cells. For bond prices, round your answers to the nearest hundred dollars. For interest yields, round your answers to 2 decimal places. Bond Price Interest Yield, % $8,000 7.78 $10,000 $11,000 5.38 b. What generalization can you draw from the completed table? Bond prices and interest rates are directly related. Bond prices and interest rates are not related. O Bond prices and interest rates are inversely related. O There is insufficient data to make a generalization. O O O O

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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