Kebt Corporation's Class Semi bonds have a 12-year maturity and an 6.00% coupon paid semiannually (3% each 6 months), and those bonds sell at their $1,000 par value. The firm's Class Ann bonds have the same risk, maturity, nominal interest rate, and par value, but these bonds pay interest annually. Neither bond is callable. At what price should the annual payment bond sell?

Price of bond = $997.76

Explanation:

Using Excel, Effective rate = Rate(Nominal rate, NPer)

Effective rate = Rate(3%, 2)

Effective rate = 0.030225

Effective rate = 3.0225%

Calculation of the selling price of the bond

Price of bond = PV(Rate, Nper, PMT, FV)

Rate = 3.0225%

Nper = 12

PMT = -1000*3% = -30

FV = -1000

Price of bond = PV(3.0225%, 12, -30, -1000)

Price of bond = 997.7633542

Price of bond = $997.76

d. the economy will face inflation.

ans.

heterothermic organisms include those organisms that can switch between homeothermic (having body temperature higher than environment) and poikilothermic (having variation in internal body temperature) strategies.

some migratory birds show heterothermy as they decrease their metabolic rate during cold nights to keep their body temperature low. drop in metabolic rate allows increase in production efficiency of birds that reduces the internal body temperature to make it equal to external cold temperature during cold nights.

thus, the correct answer is 'birds allow their temperature drop in order to increase their production efficiency.'