12)Alex buys a bond for $10,000 and receives interest payments of $500 every six months. The interest rate on the bond is approximately Group of answer choices   4 percent. 8 percent. 10 percent. 15 percent.

Q: During the subprime mortgage crisis in the USA, the housing market suffered the worst slump in…

A:

Q: Savings, Investment Spending, and the Financial System- End of Chapter Problems 16. Sallie Mae is a…

A: a) Sallie Mae has engaged in securitization which is her packaging process. Because the likelihood…

Q: reate a numerical example using tax rate or household income to find the derivative of a function of…

A: Suppose there are 2 commodities x1,x2  The price for x1 is p1,and for x2 is p2  Household income;…

Q: Dr. Rubin has $10,000 to invest for three years. Two banks offer a 2 percent interest rate, but bank…

A: Given: Amount=$10000 Interest rate=2%

Q: Cumulative Preferred stock can be purchased by anyone, but it is more likely that someone over 50…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: When interest rates decrease: Group of answer choices   people who are borrowing money will benefit…

A: Interest rates affect the economy by influencing bond and stock interest rates, consumer and…

Q: Imagine that someone offers you $100 today or $200 in 10 years. You would prefer to take the $100…

A: The formula is given by- F = P *(1+i)^t

Q: Consider the 2-period household model that you have seen in the asynchronous class. Suppose the…

A: A fall in interest rate makes borrowing seems cheaper, as a lesser amount has to be paid in return.

Q: According to Milton Friedman, when the public holds more cash balances than it desires at any level…

A: Thus, Friedman offers quantity theory as a theory of money demand, with money demand supposed to be…

Q: If mortgage rates rise from 5% to 10% but the expected rate of increase in housing prices prices…

A: Given the information: The rise in mortgage rates = 5% to 10% Rise in price of houses = 2% to 9%

Q: Marginal propensity to save is: A   total saving divided by total income. B   the change in…

A: Marginal propensity to saving (MPS) refers to the additional saving due to increase the level of…

Q: Suppose that a new bond rating service is established that specializes in rating municipal bonds…

A: Financial market: - it is a market for financial securities where people buy and sell financial…

Q: It is a well-known fact that high-interest rates make loans more expensive. When interest rates are…

A: An interest rate is either the the reward for saving  cost or the cost of borrowing money. It is…

Q: You took an amazing class at the U that changed your life, so now you are going to invest for your…

A: Given:Real interest rate=11%Tax bracket:Federal=25%State=5%

Q: Many workers hold large amounts of stock issued by the firms at which they work. Why do you suppose…

A: Companies support this activity because the employee works hard to contribute directly or indirectly…

Q: List three different ways that a risk-averse person can reduce financial risk.

A: Financial Risk would result in the risk which would be borne by the investor which results in the…

Q: Write TRUE if the statement is right and FALSE if it is wrong:   _____     7. Cost Benefit…

A: Ans. 7 A Cost-Benefit Analysis is referred to as a systematic process used by businesses to analyze…

Q: Suppose Charles would like to use $4,000 of his savings to make a financial investment. One way of…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Q: 1. When interest rate i increases, equilibrium output Y will _____. A. Increase B. Decrease C.…

A: Whenever interest rates are raised, investment will be discouraged due to the greater opportunity…

Q: Using the theories of consumer behavior we studied in class, in your opinion, the act of people…

A: We have to find the theories of consumer behaviour.

Q: What refers to the interest rate at which the present worth of net cash flow of an investment equals…

A: The rate of return at which the sum of all present values of all the cash flows becomes zero is…

Q: When the interest rate on a bond is below the equilibrium interest rate, there is excess in the bond…

A: Bonds are fixed-income instruments that represent the loan made between the investors are lenders.…

Q: 2c. Mathematically derive slope of IS curve. Prove that if investment does not depend on interest…

A: The IS curve tells us about the several combinations of national income and interest rate where the…

Q: When deleveraging occurs, the price of assets falls, causing firm net worth to decrease. Why does…

A: Deleveraging refers to the process undertaken by the company to reduce its debt obligation or it is…

Q: Suppose Kim has determined that a $100,000 universal life insurance policy would best suit her…

A: Hi! thanks for the question but as per the guidelines, we answer only three parts at one time.…

Q: 51. Permanent Income and winning the lottery. Remember to explain the reasoning behind your answers.…

A: a. Because of consumption smoothing the consumption will be split across the periods in such a way…

Q: the given data in solving ! Joey borrowed money from the bank. He receives from the bank P1340 and…

A: Given Information Amount borrowed = P1340future value = P1500Time = 9/12

Q: Cindy takes a summer job and earns an after-tax income of $4,500. Her living expenses during the…

A: After-tax income is $4500 Expenses are $1000

Q: The disposable income from your part-time job in 2019 was $18,800. In 2018, you borrowed $700 at 14…

A: Disposable income is the after-tax income that can be used for investment, spending, and savings.

Q: Suppose you buy a house for $175,000. One year later, the market price of the house has risen to…

A: Return on investment can be calculated as follows.

Q: A decrease in the interest rate would a. shift investment demand left b. lead to a downward…

A: Equilibrium rate of interest is where the demand curve for investment intersects the total supply…

Q: The interest rate is determined by... a) Financial markets and do not affect the market for goods…

A: Interest rate: - it is the percentage charge on the principal amount by a lender to a borrower.…

Q: Draw and explain a graph for a two-period consumer. Include the budget line, indifference curve,…

A: An expansion in the rate of interest will cause a clockwise pivot in the budget line as demonstrated…

Q: The interest rate is 7 percent. Use the concept of present value to compare $200 to be received in…

A: If r is the interest rate, then amount X to be received in n years will have a present vale of :…

Q: Suppose the tax rate on interest income from saving were reduced.   a. The income effect, but not…

A: Interest income: It is the amount of interest earned during a particular period of time.

Q: Corporations often offer ________ to investors as some tangible evidence that the corporation is…

A: Meaning of Financial Assets: The term financial assets refer to the situation, under which these…

Q: 1. Consider a two-period model in which you work and save in the initial period (period 0) and live…

A: Period 0 income= $250,000 Period 0 income= $0

Q: Homework (Ch 26) 1. Financial institutions in the U.S. economy Suppose Kenji would like to use…

A: Company k would like to use $2000 of his saving to make a financial investment by purchase stock or…

Q: Explain how the following transactions affect Bangladeshi NCO? Does this transaction affect direct…

A: Ans: 1) Since Pran food ltd. is an organization of Bangladeshi origin and situated in Bangladesh, so…