Phili Manufacturing, Inc. bonds have a face value of $1,000, a coupon rate of 6.5 percent, semiannual interest payments, and mature in 19 years. What is the current price of these bonds if the yield to maturity is 6.65 percent

Bond Price= 913.95

Explanation:

Giving the following information:

Face value= $1,000

Cupon= (0.065/2)*1,000= 32.5

YTM= 0.0665/2= 0,03325

Time period= 19*2= 38

To calculate the price of the bond, we need to use the following formula:

Bond Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price= 32.5*{[1 - (1.03325^-38)] / 0.03325} + [1,000/(1.03325^38)]

Bond Price= 625.42 + ^288.53

Bond Price= 913.95

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.