The rise and fall of a bond's price has a direct inverse relationship to its yield to maturity, or interest rate. As prices go up, the yield declines and vice versa. For example, a $1000 bond might carry a stated annual yield, known as the coupon of 7 %, meaning that it pays $70 a year to the bondholder. If that bond was bought for $920 , the actual yield to maturity would be 7.61 % ($70 annual interest on $920 of principal). Do you agree with this analysis? Briefly explain.

A. The analysis is partially correct. There is an inverse relationship between bond prices and bond yields, and the rate of return on the coupon payment is higher if the purchase price is lower. The analysis does not take into account the present value equation of calculating a bond yield. The yield to maturity must be calculated without using present value analysis.
B. The analysis is partially correct. There is a direct relationship between bond prices and bond yields, and the rate of return on the coupon payment is higher if the purchase price is higher. However, the analysis does not take into account the present value equation of calculating a bond yield. The yield to maturity must be calculated using present value analysis.
C. The analysis is partially correct. There is an inverse relationship between bond prices and bond yields, and the rate of return on the coupon payment is higher if the purchase price is lower. However, the analysis does not take into account the present value equation of calculating a bond yield. The yield to maturity must be calculated using present value analysis.
D. None of the above.

Sean has placed a job ad and is now interviewing potential employees. which of the following questions is he legally allowed to ask during the interview? do you have any disabilities that will require special accommodation? how many children do you have? where did you earn your degree and how has it prepared you for this position? is this your maiden name that you have listed on the job application?

Onsider the following subscription behavior information from genie, a web site that provides tools for constructing a family tree (ancestor search). subscriptions cost $9.99 per month, but you are charged for the entire year at the time of purchase. there is a one-year minimum term when you sign up for the service. once purchased, subscriptions are set to renew automatically unless the subscriber cancels them. when a membership renews, it renews for a one-year term and again you are charged for the entire year. there are no variable costs associated with providing this service to an individual customer, but genie does engage in customer relationship activities that they believe will increase customer retention. these customer relationship activities cost genie about $10 per year per customer. based on a sample of 1000 customers that joined genie five years ago, near the time when the company was founded, they were able to determine how many of those customers remained subscribers in the second year, third year etc. based on this information, genie calculated the average annual retention rate to be 20%. genie uses an annual discount rate of 8%. a. last year, genie spent $10,000 placing advertisements on google. genie management believes that these advertisements were responsible for about 300 new subscribers. would you recommend to genie management that they purchase more google ads? b. suppose a newly-introduced loyalty program increases the number of customers that remained to 30%. does this new data change your answer to 9.a? c. do you have any hesitations or concerns about making recommendations to management based on your above estimate of customer lifetime value?

Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks. the portfolio's beta is 1.25. now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.55. what would the portfolio's new beta be? do not round your intermediate calculations.