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Call and Sinking Fun Provisions

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A. What are bond's key features?
b. What are call provisions and sinking fun provisions? Do these provisions make funds more or less risky?
c. How is the value of any asset whose value is based on expected future cash flows determined?
g. What is interest rate (or price) risk? Which has more interest rate risk, an annual payment 1-year bond or a 10-year bond? Why?
h. What is reinvestment rate risk? Which has more reinvestment rate risk, a 1-year bond or a 10-year bond?
i. How does the equation for valuing a bond change if semiannual payments are made? Find the value of a 10-year, semiannual payment, 10% coupon bond if nominal rd=13%.
l. Does the yield to maturity represent the promised or expected return on the bond? Explain.
m. These bonds were rated AA-by S&P. Would you consider them investment-grade or junk bonds?
n. What factors determine a company's bond rating?
o. If this firm were to default on the bonds, would the company be immediately liquidated? Would the bond-holders be assured of receiving all of their promised payments? Explain.

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a. What are bond's key features?
* The key features of a bond are its par/face value, the coupon rate (this is the rate which the investment is to be paid at during purchase), the market rate/current yield to maturity, and the time frame of the bond.

b. What are call provisions and sinking fun provisions? Do these provisions make funds more or less risky?
* Call provisions are statutes governing bonds that gives the issuers of the bond, preferred stock and any other issuers the right but not the responsibility to redeem a security prior to its maturity. On the other hand, a sinking fund provision is a stipulation within a bond in which the borrower can retire a certain proportion of the debt or bond annually. This retirement can be done via calling the bond from investors or buying the same from the open market.
* These provisions make funds less risky since essentially, when bonds are purchased, they are assumed to be held to maturity. Inserting provisions give flexibility based on the conditions contained, therefore reducing the risk element of ...

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A Day Without Air Conditioning

See the attached file.

1- Assist with ideas and help write a brief, but well written summary of the article. Then a second paragraph
discussing: What would a day without AC be like for you? Think of a typical day and whether it would be an enjoyable experience. Why or why not?

Article:

Washington didn't grind to a sweaty halt last week under triple-digit temperatures. People didn't even slow down. Instead, the three-day, 100-plus-degree, record-shattering heat wave prompted Washingtonians to crank up their favorite humidity-reducing, electricity-bill-busting, fluorocarbon-filled appliance: the air conditioner.

This isn't smart. In a country that's among the world's highest greenhouse-gas emitters, air conditioning is one of the worst power-guzzlers. The energy required to air-condition American homes and retail spaces has doubled since the early 1990s. Turning buildings into refrigerators burns fossil fuels, which emits greenhouse gases, which raises global temperatures, which creates a need for -- you guessed it -- more air-conditioning.
A.C.'s obvious public-health benefits during severe heat waves do not justify its lavish use in everyday life for months on end. Less than half a century ago, America thrived with only the spottiest use of air conditioning. It could again. While central air will always be needed in facilities such as hospitals, archives and cooling centers for those who are vulnerable to heat, what would an otherwise A.C.-free Washington look like?

At work

In a world without air conditioning, a warmer, more flexible, more relaxed workplace helps make summer a time to slow down again. Three-digit temperatures prompt siestas. Code-orange days mean offices are closed. Shorter summer business hours and month-long closings -- common in pre-air-conditioned America -- return.
Business suits are out, for both sexes. And with the right to open a window, office employees no longer have to carry sweaters or space heaters to work in the summer. After a long absence, ceiling fans, window fans and desk fans (and, for that matter, paperweights) take back the American office.

Best of all, Washington's biggest business -- government -- is transformed. In 1978, 50 years after air conditioning was installed in Congress, New York Times columnist Russell Baker noted that, pre-A.C., Congress was forced to adjourn to avoid Washington's torturous summers, and "the nation enjoyed a respite from the promulgation of more laws, the depredations of lobbyists, the hatching of new schemes for Federal expansion and, of course, the cost of maintaining a government running at full blast."

Post-A.C., Congress again adjourns for the summer, giving "tea partiers" the smaller government they seek. During unseasonably warm spring and fall days, hearings are held under canopies on the Capitol lawn. What better way to foster open government and prompt politicians to focus on climate change?

At home

Homeowners from Ward 8 to the Palisades pry open double-hung windows that were painted shut decades ago. In the air-conditioned age, fear of crime was often cited by people reluctant to open their homes to night breezes. In Washington, as in most of the world's warm cities, window grilles (not "bars," please) are now standard.

In renovation and new construction alike, high ceilings, better cross-ventilation, whole-house fans, screened porches, basements and white "cool roofs" to reflect solar rays become de rigueur. Home utility bills plummet.
Families unplug as many heat-generating appliances as possible. Forget clothes dryers --post-A.C. neighborhoods are crisscrossed with clotheslines. The hot stove is abandoned for the grill, and dinner is eaten on the porch.

Around town

Saying goodbye to A.C. means saying hello to the world. With more people spending more time outdoors -- particularly in the late afternoon and evening, when temperatures fall more quickly outside than they do inside -- neighborhoods see a boom in spontaneous summertime socializing.

Rather than cowering alone in chilly home-entertainment rooms, neighbors get to know one another. Because there are more people outside, streets in high-crime areas become safer. As a result of all this, a strange thing happens: Deaths from heat decline. Elderly people no longer die alone inside sweltering apartments, too afraid to venture outside for help and too isolated to be noticed. Instead, people look out for one another during heat waves, checking in on their most vulnerable neighbors.

Children -- and others -- take to bikes and scooters, because of the cooling effect of air movement. Calls for more summer school and even year-round school cease. Our kids don't need more time inside, everyone agrees; they need the shady playgrounds and water sprinklers that spring up in every neighborhood.
"Green roofs" of grass, ivy and even food crops sprout on the flat tops of government and commercial buildings around the city, including the White House. These layers of soil and vegetation (on top of a crucially leak-proof surface) insulate interiors from the pounding sun, while water from the plants' leaves provides evaporative cooling. More trees than ever appear in both private and public spaces.

And the Mall is reborn as the National Grove.

See attached for other 2 articles.

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