A bond offers a $50 coupon, has a face value of $1,000, and has 10 years to maturity. If the interest rate is 4.0% what is the value of this bond?
What will be an ideal response?
Realizing that the price of the bond is the sum of the present value of all payments we simply calculate the present value of each payment and sum these. With the help of a financial calculator or a spreadsheet if necessary, we see the value of the bond is $1,081.10.
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The free-rider problem can arise when consumption of a good is
A) rival. B) excludable. C) nonrival but excludable. D) nonexcludable.
If consumers are less willing and able to pay for each level of output than they were previously, then apparently: a. demand has increased
b. supply has increased. c. demand has decreased. d. there has been a movement down along the demand curve.
First-differenced estimation in a panel data analysis is subject to serious biases if _____.
A. key explanatory variables vary significantly over time B. the explanatory variables do not change by the same unit in each time period C. one or more of the explanatory variables are measured incorrectly D. the regression model exhibits homoscedasticity
In the U.S. economy, rents are the smallest source of household income.
Answer the following statement true (T) or false (F)