Generic Inc. issued bonds in 1988 that will mature 16 years from the date of issue. The bond pays a 14.375 percent coupon and the interest is paid semiannually. Its current price is $1,508.72. What is the effective annual yield on the bonds?

8.93%

Explanation:

If we want to determine the effective annual yield on the bonds we must calculate the yield to maturity of the bonds:

YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]

YTM = {71.875 + [($1,000 - $1,508.72)/32]}/ [($1,000 + $1,508.72)/2]

YTM = 55.9775 / 1,254.36 = 0.04463 x 2 semiannual coupons = 8.93%

d,

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know