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Author Question: The bond indenture is A) a contract between the bond issuer and bond buyers. B) escrow ... (Read 129 times)

tiffannnnyyyyyy

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on: Jul 10, 2018
The bond indenture is
 
  A)
 
  a contract between the bond issuer and bond buyers.
  B)
 
  escrow interest when a bond is in default.
  C)
 
  a bondholder lien against the issuer.
  D)
 
  the institution representing bond buyers' interests.

Question 2

At your birth, your grandparents put 5,000 into a college fund for you. Now you want to use the fund to pay your first year of college costs of 23,000.
 
  To have enough money in your college fund for your stated purpose, what annual rate of return would have to have been earned on the account over an 18-year period?
  What will be an ideal response?


TDubDCFL

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Reply #1 on: Jul 10, 2018
Answer to Question 1

A

Answer to Question 2

Answer: r = (FV/PV)1/n - 1 = (23,000/5,000)1/18 - 1 = 8.85 per year.


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