The country of Zanibar is facing an annual inflation rate of…
The country of Zanibar is facing an annual inflation rate of 12%, which is much higher than its historical average of 3%. Meanwhile, wages have only increased by 4% over the same period. What are the likely effects of this disparity between the inflation rate and wage growth on the average citizen in this country?
Read DetailsA bond has a face value of $1,000, coupon rate of 8%, and ma…
A bond has a face value of $1,000, coupon rate of 8%, and matures in 6 years. Imagine that the market interest rate is 6%, but immediately after you buy the bond the rate drops to 5%. What is the immediate effect on the bond price? Hint: the effect is the price of the bond after the change minus the price of the bond before the change. Enter the resulting price effect in dollars, rounded to the nearest cent (2 decimals). Use a the ‘-‘ sign if the effect is negative.
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