Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of Interest of $900. a. In the table provided below, calculate and enter elther 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 $8,500 Interest Yield, % 9.47 $ 10,500 $ 11,500 6.67 b. What generalization can you draw from the completed table? Bond prices and Interest rates are directly related. O There Is Insufficient data to make a generalization. O Bond prices and Interest rates are not related. O Bond prices and Interest rates are Inversely related.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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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 $900.
a. In the table provided below, calculate and enter elther 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
$8,500
Interest Yield, %
9.47
$ 10,500
$ 11,500
6.67
b. What generalization can you draw from the completed table?
Bond prices and Interest rates are directly related.
O There Is Insufficient data to make a generalization.
O Bond prices and Interest rates are not related.
O Bond prices and Interest rates are Inversely related.
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 $900. a. In the table provided below, calculate and enter elther 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 $8,500 Interest Yield, % 9.47 $ 10,500 $ 11,500 6.67 b. What generalization can you draw from the completed table? Bond prices and Interest rates are directly related. O There Is Insufficient data to make a generalization. O Bond prices and Interest rates are not related. O Bond prices and Interest rates are Inversely related.
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