Illustrate the Risks involved with bonds
Illustrate the Risks involved with bonds?
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Risks involved with bonds include:
a. Capital risk, which means that the market price of a bond can change if market interest rates change and a holder needs to sell a bond before its maturity date. Note that the market price of a bond varies inversely with market interest rates.
b. Risk of unexpected inflation means that the purchasing power of the bond will fall because its interest rate is less than the inflation rate.
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9. The following table shows annual sales data for Stuff Happens, Inc., over the ten-year 1998-2008 period: Year Sales ($ Millions) 1998 $2.0 1999 2.2 2000 2.4 2001 2.6 2002 2.8 2003 3.0 2004 3.2 2005 3.5 2006 3.8 2007 4.1 2008 4.3 A. Calculate the 1998-2008 growth rate in sales using
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