How much can wilma expect to sell her bond for

Assignment Help Econometrics

Reference no: EM13235235

Wilma bought a 10-year $1000 bond when the interest rate was 5% per year. So her bond would provide her with $50 at the end of each of ten successive years; and the $1000 is also returned at the end of ten years. She has just collected her seventh annual payment on the bond.
Suppose now she wants to sell the bond because she is in need of money sooner than expected

a. Suppose the interest rate is still 5% and this is expected to continue for the remaining life of the bond. How much can she expect to sell her bond for?

b. Suppose the interest rate has increased to 10% and this is 10% rate is expected to continue for the remaining life of the bond. How much can she expect to sell her bond for?

Reference no: EM13235235

Questions Cloud

Explain what is the ph of the solution after adding : what is the pH of a solution made by adding 5.42grams of potassium nitrite, to 727mL of .178 M nitrous acid(assume no change in volume takes place) and what is the pH of the solution after adding 49 mL of .100 M NaOH

Find the best response function for each firm : Consider the short-run situation of a market with three identical firms producing homogeneous outputs. Each firm's total cost function is C(q) = (1/2)q2, where q 0 is a possible output. Market demand is given by Q(p) = 2-2P

Explain electrolyze a solution containing : We electrolyze a solution containing M2O7(3-) for 43.30 hr using a current of 2.685 amp to isolate M(s), which has an atomic weight of 215.22. How many grams of M(s) will be produced if we operate the system at 100% efficiency

Create method takes two integers input parameters and cheks : Create a method that takes two integers input parameters and checks whether one number is divisible by the other

How much can wilma expect to sell her bond for : Wilma bought a 10-year $1000 bond when the interest rate was 5% per year. So her bond would provide her with $50 at the end of each of ten successive years; and the $1000 is also returned at the end of ten years.

Compute the ph and the concentration of the other species : The value of Ka in water at 25 degrees Celcius for benzoic acid, C6H5COOH (aq), is 6.3 x10-5 M. Calculate the pH and the concentration of the other species in a 0.0200-M aqueous solution of C6H5COOH (aq).

Estimate the marginal propensity to consume to be : Suppose economists observe that an increase in government spending of $10 billion raises the total demand for goods and services by $30 billion. (a) If these economists ignore the possibility of crowding out

Explain the final temperature used during the run : why during a GC is the boiling point for some samples higher than the final temperature used during the run yet these samples still run

Create a method that prints rectangle characters to console : Create a method that prints a rectangle of characters to the console

User Account

All Pages