Hello, Please explain. Let's denote the price of a nonmaturing bond(called aconsol) as Pb.
Hello, Please explain.
Let’s denote the price of a nonmaturing bond(called a consol) as Pb. The equation that indicates this price is Pb=I/r, where I is the annual net income the bond generates and r is the nominal market interest rate.
a. Suppose that a bond promises the holder $500 per year forever. The nominal market interest rate is 4 percent.
Need assignment help for this question?
If you need assistance with writing your essay, we are ready to help you!
OUR PROCESS
Order
Payment
Writing
Delivery
Why Choose Us: Cost-efficiency, Plagiarism free, Money Back Guarantee, On-time Delivery, Total Сonfidentiality, 24/7 Support, 100% originality
Calculate the bond’s current price: $.
(Round your answer to the nearest whole dollar.)
Thank you!
