Why is the bond market so sensitive to interest rates? What is the mathematics behind this relationship? Do a Google search to find a corporate bond issue where the company has either defaulted on the payments or called back the bonds.

Sample solution

Dante Alighieri played a critical role in the literature world through his poem Divine Comedy that was written in the 14th century. The poem contains Inferno, Purgatorio, and Paradiso. The Inferno is a description of the nine circles of torment that are found on the earth. It depicts the realms of the people that have gone against the spiritual values and who, instead, have chosen bestial appetite, violence, or fraud and malice. The nine circles of hell are limbo, lust, gluttony, greed and wrath. Others are heresy, violence, fraud, and treachery. The purpose of this paper is to examine the Dante’s Inferno in the perspective of its portrayal of God’s image and the justification of hell. 

In this epic poem, God is portrayed as a super being guilty of multiple weaknesses including being egotistic, unjust, and hypocritical. Dante, in this poem, depicts God as being more human than divine by challenging God’s omnipotence. Additionally, the manner in which Dante describes Hell is in full contradiction to the morals of God as written in the Bible. When god arranges Hell to flatter Himself, He commits egotism, a sin that is common among human beings (Cheney, 2016). The weakness is depicted in Limbo and on the Gate of Hell where, for instance, God sends those who do not worship Him to Hell. This implies that failure to worship Him is a sin.

God is also depicted as lacking justice in His actions thus removing the godly image. The injustice is portrayed by the manner in which the sodomites and opportunists are treated. The opportunists are subjected to banner chasing in their lives after death followed by being stung by insects and maggots. They are known to having done neither good nor bad during their lifetimes and, therefore, justice could have demanded that they be granted a neutral punishment having lived a neutral life. The sodomites are also punished unfairly by God when Brunetto Lattini is condemned to hell despite being a good leader (Babor, T. F., McGovern, T., & Robaina, K. (2017). While he commited sodomy, God chooses to ignore all the other good deeds that Brunetto did.

Finally, God is also portrayed as being hypocritical in His actions, a sin that further diminishes His godliness and makes Him more human. A case in point is when God condemns the sin of egotism and goes ahead to commit it repeatedly. Proverbs 29:23 states that “arrogance will bring your downfall, but if you are humble, you will be respected.” When Slattery condemns Dante’s human state as being weak, doubtful, and limited, he is proving God’s hypocrisy because He is also human (Verdicchio, 2015). The actions of God in Hell as portrayed by Dante are inconsistent with the Biblical literature. Both Dante and God are prone to making mistakes, something common among human beings thus making God more human.

To wrap it up, Dante portrays God is more human since He commits the same sins that humans commit: egotism, hypocrisy, and injustice. Hell is justified as being a destination for victims of the mistakes committed by God. The Hell is presented as being a totally different place as compared to what is written about it in the Bible. As a result, reading through the text gives an image of God who is prone to the very mistakes common to humans thus ripping Him off His lofty status of divine and, instead, making Him a mere human. Whether or not Dante did it intentionally is subject to debate but one thing is clear in the poem: the misconstrued notion of God is revealed to future generations.

 

References

Babor, T. F., McGovern, T., & Robaina, K. (2017). Dante’s inferno: Seven deadly sins in scientific publishing and how to avoid them. Addiction Science: A Guide for the Perplexed, 267.

Cheney, L. D. G. (2016). Illustrations for Dante’s Inferno: A Comparative Study of Sandro Botticelli, Giovanni Stradano, and Federico Zuccaro. Cultural and Religious Studies4(8), 487.

Verdicchio, M. (2015). Irony and Desire in Dante’s” Inferno” 27. Italica, 285-297.

Sample Solution

The bond market is especially sensitive to interest rates because the price of a bond and its yield (or rate of return) are inversely related. This means that when interest rates go up, the value of bonds goes down and vice versa. The mathematics behind this relationship can be seen by looking at the formula for calculating a bond’s yields: Yield = Coupon Rate/(1 + RV/N), where RV is the current market value of the bond, N is the number of payments left on the bond, and Coupon Rate is set by the issuer. As interest rates rise or fall, so too does RV since it reflects changes in prevailing interest rates – as interest rates increase, RV decreases resulting in lower yields for investors.

Sample Solution

The bond market is especially sensitive to interest rates because the price of a bond and its yield (or rate of return) are inversely related. This means that when interest rates go up, the value of bonds goes down and vice versa. The mathematics behind this relationship can be seen by looking at the formula for calculating a bond’s yields: Yield = Coupon Rate/(1 + RV/N), where RV is the current market value of the bond, N is the number of payments left on the bond, and Coupon Rate is set by the issuer. As interest rates rise or fall, so too does RV since it reflects changes in prevailing interest rates – as interest rates increase, RV decreases resulting in lower yields for investors.

Despite their sensitivity to fluctuations in interest rates, corporate bonds remain an attractive option for many businesses due to their relatively low cost compared to other forms of borrowing. Unfortunately there have been instances where companies have defaulted on their payments or called back their bonds before maturity dates were reached due to financial difficulties or other reasons – one such example is Toys R Us which filed for bankruptcy in 2018 prior to any repayment being made on its debt securities (bonds).

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