John owns a corporate bond with a coupon rate of 8% that matures in 10 years. Bill owns a corporate bond with a coupon rate of 12% that matures in 25 years. If interest rates go down, then:
A. the value of John's bond will decrease and the value of Bill's bond will increase.
B. the value of both bonds will increase.
C. the value of Bill's bond will decrease more than the value of John's bond due to the longer time to maturity.
D. the value of both bonds will remain the same because they were both purchased in an earlier time period before the interest rate changed.
Answers: 3
Business, 21.06.2019 16:10
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Business, 22.06.2019 13:40
Determine if the following statements are true or false. an increase in government spending can crowd out private investment. an improvement in the budget balance increases the demand for financial capital. an increase in private consumption may crowd out private investment. lower interest rates can lead to private investment being crowded out. a trade balance in sur+ increases the supply of financial capital. if private savings is equal to private investment, then there is neither a budget sur+ nor a budget deficit.
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Business, 22.06.2019 23:40
Gif the federal reserve did not regulate fiscal policy, monitor banks and provide services for banks, what would most likely be the economic conditions to transact business in the u.s.? the economy would primarily be based on a barter system rather than a fiat system. there would be no discrimination in lending by local banks. the economy would be less efficient and transactions most likely more costly.
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John owns a corporate bond with a coupon rate of 8% that matures in 10 years. Bill owns a corporate...
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