Consider a bond paying a coupon rate of 10% per year semiannually when the market interest rate is only 4%. the bond has 3 years until maturity.

a. find the bond price today and six months from now after the next coupon is paid, assuming the market rate will be constant during the following 6 months.
b. what is the total rate of return (holding period return) on the bond over the six month period?

Consider the market for gas-powered small cars. assume gas-powered small cars are a normal good. for each of the following events, identify which of the determinants of demand or supply are affected. if demand is unaffected by this event because it creates only a supply change, select the “none” option under the “demand determinant” column. similarly, if supply is unaffected by this event because it creates only a demand change, select the “none” option under the “supply determinant” column. event demand determinant supply determinant people decide to have more children. the price of electric small cars falls. the discovery of a new source of iron ore lowers steel prices. an economic recession lowers people’s wealth. a number of major car dealers decide to switch from selling gas-powered cars to selling electric cars. show the effect of the following event on the market for gas-powered small cars: people decide to have more children for each of the four independent situations, prepare the journal entries to record the exchange on the books of each company.