9. Consider a 3 year coupon bond with a face value of $100 and 5% annual coupon rate.
(a) If you purchase this bond at the price of $102, then what is the yield to maturity of this bond？
(b) Follow part (a), if you purchase this bond and decide to hold it to maturity, then what is your expected rate of return?
(c) If you sell this bond at the price of $98 after one year, then what is your annual rate of return？
Answers
a. 3.8% is the yield to maturity of this bond, b. The expected rate of return is 5%, c. The annual rate of return is -2.94%.
(a) If you purchase this bond at the price of $102, then the yield to maturity of this bond is 3.8%.
The given information is as follows:
Face value of bond (F) = $100
Annual coupon rate (C) = 5%
Years to maturity (N) = 3
Purchase price (P) = $102
The yield to maturity (YTM) is the rate of return on a bond if it is held to maturity.
The formula to calculate yield to maturity is, Where, F = Face value of bond
P = Purchase price of bond
C = Annual coupon rate
N = Years to maturity
Using the above formula, we can find the yield to maturity of the given bond,
YTM = 2.83% + 0.50 = 3.8%
(b) If you purchase this bond and decide to hold it to maturity, then your expected rate of return will be 5%.
If the bond is held to maturity, then the expected rate of return is the coupon rate of the bond. Thus, the expected rate of return is 5%.
(c) If you sell this bond at the price of $98 after one year, then your annual rate of return is -2.94%.
Given, Purchase price (P) = $102Selling price (S) = $98Holding period (n) = 1 year
The formula to calculate the annual rate of return is,
\(rate of return = [(S - P) / P] / n\)
Using the above formula, we can find the annual rate of return of the given bond,
Annual rate of return = [(98 - 102) / 102] / 1= -0.0392 = -3.92%
The negative sign in the answer indicates that the rate of return is negative, which means that the investment resulted in a loss. Thus, the annual rate of return is -2.94%.
Learn more about bond here
https://brainly.com/question/33524257
#SPJ11
Related Questions
Judging is:
Select the best answer choice.
A.
One's openness and flexibility to new information
B.
Perceiving people
C.
Responding to what the world throws at an individual
D.
Imposing order on the outside world
Answers
True or False: Marketers can control the external environment in which their organizations operate.
Answers
Marketers can control the external environment in which their organizations operate. The given statement is False.
Why is it important for marketers to understand the external environment?
Environmental scanning is the examination of external environmental factors that can have an impact on an organization. Environmental data is valuable to marketers because it can inform them about potential competitors, changing consumer tastes and preferences, potential market trends, risks, and opportunities.
Although marketers can influence the external environment and control the marketing mix, they cannot control the external environment in which their organizations operate.
Thus, the mentioned above-given statement is False.
Learn more about the external environment here:
https://brainly.com/question/29652913
#SPJ1
The drawee is the
Question 4 options:
person who writes the check.
person who reconciles the account.
bank with which the drawer has an account.
person to whom the check is payable.
Answers
Answer:
C
Explanation:
The drawee is the bank with which the drawer has an account.
An overview and summary of the marketing plan. it should cover what is going to be discussed in greater detail later in the plan. which is the correct answer?
question 19 options:
situation analysis
executive summary and business description
define the target market
delivery plan
Answers
Answer:it is what the other guy sayes
What are the three main decision-making types discussed in the article? (Site 1)
Answers
Answer:
hope it helped
Explanation:
1. Certain
2. Risk
3. Uncertainty
Answer:
1. Certain
2. Risk
3. Uncertainty
Explanation:
when loan payments are amortized, the total amount you owe every month remains constant but the amount of interest you own decrease every month. true or false
Answers
It is true that when loan payments are amortized, the total amount you owe every month remains constant but the amount of interest you owe decreases every month.
What happens when loan payments are amortized?When loan payments are amortized, the total amount you owe every month remains constant but the amount of interest you owe decreases every month. This is because the payments are structured to pay off both principal and interest, with more of the payment going towards interest at the beginning of the loan term and more going towards principal as the loan matures.
To know more about loan payments:
https://brainly.com/question/2591679
#SPJ11
What are the differences between forward market and futures
market?
(b) What are futures price, spot Price, and settlement price?
How are these prices connected with each other in the futures
market?
Answers
The main differences between forward market and futures market are the following:
1. A forward contract is an agreement between two parties to buy or sell an underlying asset on a future date at a predetermined price. A futures contract is an agreement between two parties to buy or sell an underlying asset on a future date at a price determined by the market.
2. Forward contracts are customized contracts between two parties, whereas futures contracts are standardized contracts traded on an exchange.
3. Forward contracts are traded over-the-counter (OTC), while futures contracts are traded on an exchange.
4. Forward contracts have higher counterparty risk than futures contracts, since they are traded OTC.
5. In forward contracts, the buyer and seller can negotiate the terms of the contract, whereas in futures contracts, the terms are standardized.
The futures price is the price at which a futures contract trades in the futures market. The price of a futures contract is determined by supply and demand in the market.
The spot price is the price at which an asset trades in the spot market.
The settlement price is the price at which a futures contract is settled at the end of its term.
The settlement price is the average price of the underlying asset over a specified period of time, such as the last trading day of the contract.
How these prices are connected to each other in the futures market?Futures price, spot price, and settlement price are all connected to each other in the futures market. The futures price is determined by supply and demand in the market. The spot price is the price at which an asset trades in the spot market. The settlement price is the price at which a futures contract is settled at the end of its term. When a futures contract is settled, the buyer pays the seller the difference between the futures price and the settlement price. The settlement price is usually determined by taking the average price of the underlying asset over a specified period of time, such as the last trading day of the contract.
Learn more about spot price: https://brainly.com/question/17055829
#SPJ11
Which statement regarding partial actual eviction is correct?
A
Partial actual eviction by a paramount title holder does not relieve the tenant of any rent obligation
B
Partial actual eviction by a paramount title holder relieves the tenant of the obligation to pay rent for the entire premises
C
Partial actual eviction by the landlord relieves the tenant of the obligation to pay rent for the entire premises
D
Partial actual eviction by the landlord relieves the tenant of the obligation to pay rent for only the portion of the premises from which he was evicted
Answers
Partial actual eviction occurs when the landlord or a third party prevents the tenant from using a portion of the leased property.The answer is D.
In such a scenario, the tenant can choose to continue to pay rent for the portion of the premises that he can use, or he can opt to vacate the entire property and seek damages for breach of contract. The landlord cannot demand rent for the portion of the premises that has been taken away from the tenant.
To know more about leased property, refer to the link:
https://brainly.com/question/28286103#
#SPJ11
"Given the following information, what is the shortest distance
using the minimum spanning tree technique?.
Answers
To find the shortest distance using the minimum spanning tree technique, we can apply Prim's algorithm. After calculation, the total shortest distance is 211.
Prim's algorithm is a popular algorithm used to find the minimum spanning tree (MST) of a weighted graph. The minimum spanning tree is a tree that connects all the vertices of the graph with the minimum total weight.
Prim's algorithm builds the minimum spanning tree gradually, adding the vertex with the lowest weight edge at each step until all vertices are included.
Here is the step-by-step calculation using Prim's algorithm of the given question:
Start with Branch 1.
Add Branch 7 to the tree (Distance: 21).
Add Branch 8 to the tree (Distance: 22).
Add Branch 6 to the tree (Distance: 19).
Add Branch 2 to the tree (Distance: 32).
Add Branch 5 to the tree (Distance: 29).
Add Branch 3 to the tree (Distance: 33).
Add Branch 4 to the tree (Distance: 27).
The minimum spanning tree is formed with the branches {1, 7, 8, 6, 2, 5, 3, 4}, and the total shortest distance is 211.
Learn more about Prim's algorithm here:
https://brainly.com/question/32065965
#SPJ4
What is the structure of Public corporation
Answers
Public corporate structures are managed by a board of directors. The members of the board are from all walks of industry and commerce. The chairmen of these corporations are appointed by the government. The entire capital is financed by the government.
LaBouche Company had cash receipts from customers in 2017 of $142,000. Cash payments for operating expenses were $97,000. Kelly has determined that at January 1, unearned service revenues was $13,000, and prepaid expenses were $17,500. At December 31, unearned service revenues was $18,600, and prepaid expenses were $23,100. The service revenues on cash basis is:
Select one:
a. $155,000
b. $147,600
c. $142,000
d. $136,400
Answers
At the end of the year, prepaid expenses were $23,100 and unearned service revenues were $18,600. The service's cash basis revenues total $136,400.
$142,000 plus $97,000, or $136,400, is the service revenue on a cash basis.
Revenue is the money made from regular business operations and is calculated by multiplying the average sales price by the quantity of units sold. In order to calculate net income, costs must be deducted from the top line (or gross income) figure. On the income statement, revenue is also known as sales.
A company's revenue is the money generated by its operations. Depending on the chosen accounting approach, there are several ways to compute revenue. Sales made using a credit card will be counted as revenue for products or services that were delivered to the customer. In accordance with some regulations, revenue is recorded even if payment has not yet been made.
To determine how effectively a business collects unpaid debt, it is important to review the cash flow statement. Contrarily, sales will only be recorded as revenue in cash accounting after money has actually changed hands. A "receipt" is money given to a business. An example of an activity that results in a receipt but no revenue is when a consumer prepays for a service or undeliverable products.
Learn more about revenues here
https://brainly.com/question/8645356
#SPJ4
a company has designed a new product and tested the prototype. what is the next step in product development?
Answers
Answer:
They have to test it before it can be put out on the market
Genevieve really wants to know more about programming and has been taking classes on EdX after work and on weekends. Her work does not require her to be able to code, but she is proud of herself for learning how to do it anyway. Genevieve is _________ motivated.
intrinsically
Answers
Her programming work does not require her to be able to code, but she is proud of herself for learning how to do it anyway. Genevieve is intrinsically motivated.
Programming is the technique of creating a fixed of commands that tell a computer the way to carry out a project. Programming can be executed using a selection of laptop programming languages, such as JavaScript, Python, and C++.
Programming calls for great knowledge of programming talents and properly software program development tools to manage them in a higher manner.
Learn more about programming here: https://brainly.com/question/23275071
#SPJ4
All of the following are examples of transfer payments except: _____________.
a. unemployment compensation to the unemployed.
b. welfare benefits to the poor.
c. Social Security payments to the elderly.
d. dividend payments to the wealthy
Answers
limited liability companies (llcs) are often referred to as a hybrid form because they are specifically designed to combine certain desired characteristics with those of .
Answers
Limited liability companies (llcs) are often referred to as hybrids form because they are designed to combine certain desired characteristics with those of general partnerships.
The owners of an LLC in the United States are not held personally accountable for the debts or obligations of the firm. Limited liability companies are hybrid legal structures that incorporate elements of both corporations and partnerships or sole proprietorships.
The possibility of flow-through taxes to LLC members is a feature of partnerships, even if the limited liability aspect is identical to that of a corporation. The main distinction between an LLC and a partnership is that an LLC protects the owners from the LLC's debts and liabilities by separating the company's assets from its owners' personal assets.
Learn to know more about partnerships on
https://brainly.com/question/25012970
#SPJ4
Frequently, we encounter a need for two different) linear transformations to transform a parallelogram into a rectangular region. When this happens, we need to make choices like: u = -x - Ty and v = 3x + 6y. For this example, find the inverse transformations: x = ___y = ___and use these to calculate the Jacobian: a(x, y)/a(u, v)
Answers
Jacobian method or Jacobi method is considered as one of the iterative methods for approximating the solution of a system of n linear equations in n variables.
How did this occur?
u = x - 2y................... 1
v = 4x - 3y.................... 2
By multiplying equation 1 by 4 and subtract from equation 2
v = 4x-3y
4u = 4x- 8y
That gives us v - 4u = 5y
y = v / 5 - 4 / 5 u
Now multiply equation 1 by 3 and equation 2 by 2 then subtract.
3u = 3x - 6y
2v = 8x - 6y
we get 3u - 2v = -5x
where, x = -3 /5 u + 2/5 v
and y = -4 /5 u = v/5
Hence, by Jacobian method we get x = -3 /5 u + 2/5 v
and y = -4 /5 u = v/5
To know more about Jacobian method from the given link
https://brainly.com/question/28204481
#SPJ4
An online shoe retailer's annual cost of holding inventory is 35 percent. The firm operates with a days-of-supply of 20 days, and assume there are 365 days per year. What is the inventory holding cost (in $s) for a pair of shoes that the firm purchased for $50 ?
Answers
the inventory holding cost for a pair of shoes purchased for $50 is $350.
To calculate the inventory holding cost for a pair of shoes, we need to determine the cost per day of holding inventory and then multiply it by the number of days.
First, we calculate the cost per day of holding inventory:
Cost per day = Cost of inventory * Holding cost rate
= $50 * 0.35 (35% expressed as a decimal)
= $17.50
Next, we multiply the cost per day by the number of days:
Inventory holding cost = Cost per day * Days of Supply
= $17.50 * 20
= $350
Therefore, the inventory holding cost for a pair of shoes purchased for $50 is $350.
learn more about holding cost here:
https://brainly.com/question/31236493
#SPJ11
Complete the following sentence.
It is very common for job seekers in high-tech/ ____
technology fields to acquire certifications to assure agencies of their
qualifications
Answers
It is very common for job seekers in high-tech/ Information
technology fields to acquire certifications to assure agencies of their
qualifications.
What is information technology?
Information Technology is the use of hardware and software services, and related infrastructure to manage and deliver information using voice, data, and video.
The use of information technology in today's personal, business uses is essential. It can be defined as the use of computers and other electronic devices for data reception, storage, retrieval, transmission, and manipulation.
Certifications demonstrate that you are dedicated to your profession, possess unique abilities, and are eager to keep studying in order to be at the top of your game. certifications can help you gain the skills and credentials you need to get a job.
Thus, Information technology is an appropriate response.
To learn more about Information technology
https://brainly.com/question/14426682
#SPJ1
If the reserve ratio is 10%, an open market purchase of $20,000 worth of Treasury bonds results in M1 Select one: a. decreasing by $200,000 b. decreasing by $20,000 c. increasing by $20,000 d. increasing by $200,000
Answers
The correct answer is c. increasing by $20,000. This is because when the Federal Reserve buys $20,000 worth of Treasury bonds, it pays for these bonds by crediting the account of the bank that sold the bonds.
This increases the bank's reserves by $20,000. Since the reserve ratio is 10%, the bank can now lend out an additional $180,000 (10 times the amount of the increase in reserves). This new lending increases the money supply, which includes M1. Therefore, M1 will increase by the amount of the new lending, which is $20,000. It is important to note that the reserve ratio determines the maximum amount of new lending that can result from an open market purchase. In this case, since the reserve ratio is 10%, the new lending is limited to 10 times the amount of the open market purchase.
To know more about Federal Reserve visit:
https://brainly.com/question/14700070
#SPJ11
Which of the following is a problem with the Exchange of Equivalents theory of prices? It assumes that price of a good is determined by its cost of production Sellers are greedy If people value two goods equally, there is nothing to be gained by exchanging them None of the above
Answers
The problem with the Exchange of Equivalents theory of prices is that it assumes that the price of a good is solely determined by its cost of production.
This assumption overlooks other important factors that influence prices, such as supply and demand dynamics, market competition, and consumer preferences. Price is a complex phenomenon influenced by various economic forces, and focusing solely on production costs neglects the intricate interplay between these factors. Therefore, the theory fails to account for the dynamic nature of pricing mechanisms in real-world markets.
The other options mentioned ("Sellers are greedy" and "If people value two goods equally, there is nothing to be gained by exchanging them") are not specific problems associated with the Exchange of Equivalents theory of prices.
To learn more about Exchange of Equivalents theory, visit here
https://brainly.com/question/30456016
#SPJ4
What does it mean to reconcile a checking account?
Answers
What is the expected value of each option?
Answers
With insurance is 1,780
What "Super Union" had taken on railroad companies and factories to improve the conditions for workers?
( 1 )
Knights of Labor
( 2 )
International Workers of the World (IWW)
( 3 )
American Federation of Labor (AFL)
( 4 )
American Railway Union (ARU)
Answers
Explanation:
4th one is the answer
American Railway Union (ARU)
How much will annika need to pay each year from her own savings and from loans? a. $8,000 b. $11,000 c. $15,500 d. $17,000
Answers
We want save amount with financial intelligence like a suitable savings amount is minimum 15% of annual income.
How to save Money with Financial Intelligence?Financial literacy enables us to make wise financial decisions, which is its main advantage. It imparts the knowledge and abilities required for good money management, including budgeting, saving, borrowing, and investing. This implies that we are better able to attain our financial objectives and financial stability.The general rule of thumb is to allocate your monthly after-tax income into three areas for spending: needs (50%) wants (30%) and savings (20%). You can put your money to work more effectively if you consistently maintain financial parity across three key areas of expenditure.Have you heard of the Rule of 72? It's a simple method for figuring out how long it will take for your money to double. You need only divide 72 by the interest rate you intend to receive.To learn more about Saving Plans refers to:
https://brainly.com/question/26103928
#SPJ4
Anyone who has the power to sway or persuade others, especially via their opinions and posts on a specific topic, market or industry, is known as a/an:
А
sharer
B
participant
С
contributor
D
influencer
Answers
Allowing third-party sellers to list their products on Amazon is controversial. Why would Amazon allow products sold by others to appear on its site?
a. Selection attracts consumers.
b. A network effect competitive advantage is created where more buyers attract more sellers, giving Amazon an advantage over any rival attempting to create a similar marketplace.
c. Although products are sold by third parties, Amazon gains valuable data on things such as customer browsing habits and sales.
d. Amazon's brand is reinforced as a first-choice shopping destination.
e. All of the above.
Answers
Answer:
e. All of the above.
Explanation:
Interestingly, all the above-listed options could serve as a possible reason why Amazon allows products sold by others to appear on its site.
Remember, Amazon is a marketplace; since the definition of a market involves dealings with several entities, it thus logical to expect Amazon to allow people (other sellers) to transact on its platform.
A market is described by the following supply and demand curves: QS = 4P QD = 400−P The equilibrium price is $ and the equilibrium quantity is. Suppose the government imposes a price ceiling of $60. This price ceiling is , and the market price will be $. The quantity supplied will be , and the quantity demanded will be. Therefore, a price ceiling of $60 will result in. Suppose the government imposes a price floor of $60. This price floor is , and the market price will be $. The quantity supplied will be and the quantity demanded will be. Therefore, a price floor of $60 will result in. Instead of a price control, the government levies a tax on producers of $10. As a result, the new supply curve is: QS = 4(P−10) With this tax, the market price will be $ , the quantity supplied will be , and the quantity demanded will be. The passage of
Answers
The equilibrium price of the market described by the given supply and demand curves is $200 and the equilibrium quantity is 200 units.
When the government imposes a price ceiling of $60, it is a legally mandated maximum price that sellers are allowed to charge. This price ceiling is below the equilibrium price and therefore, it will create a shortage in the market. The market price will be $60 and the quantity supplied will be 160 units, while the quantity demanded will be 240 units. Therefore, a price ceiling of $60 will result in a shortage of 80 units.
When the government imposes a price floor of $60, it is a legally mandated minimum price that sellers are allowed to charge. This price floor is above the equilibrium price and therefore, it will create a surplus in the market. The market price will be $60 and the quantity supplied will be 240 units, while the quantity demanded will be 160 units. Therefore, a price floor of $60 will result in a surplus of 80 units.
Instead of a price control, the government levies a tax on producers of $10. This tax will increase the cost of production for the sellers, shifting the supply curve upwards by $10. With this tax, the new equilibrium price will be $190, the quantity supplied will be 180 units, and the quantity demanded will be 220 units.
To know more about equilibrium visit:
https://brainly.com/question/30694482
#SPJ11
what is the marginal product of the second worker? a. 15 students b. 20 students c. 25 students d. 22.5 students
Answers
The marginal product of the second worker is option C. 25 students
What is a marginal product?Marginal product refers to the change in output as a result of employing one more unit of a particular input, for example, an increase in worker.
From the table attached, when the firm had only 1 unit of worker, the output was 20. When it increased its worker to 2, the output increased to 45.
In order to determine the marginal product,
subtract the output of the second worker from the first
Marginal Product = 45 - 20
= 25
Therefore, marginal product of the second worker = 45 - 20 = 25
learn more about marginal product: https://brainly.com/question/14867207
#SPJ1
The complete question is as shown in the attached picture.
the revolution in management that is currently under way suggests that the most effective managers of the future will
Answers
The current management revolution suggests that the most effective future managers will need to "be skilled communicators and team players."
This is because, unlike in the past, when employees tend to follow the manager's instructions to the letter without questions, many employees today tend to speak back or ask more questions.
Also, coupled with the fact that many today's employees prefer working without strict supervision, the tendency for conflicts to occur increases, and the need for motivation becomes significant.
Hence, in this case, it is concluded that future managers would need to be good communicators and team players, not just among the executives but also among the lower employees.
Learn more here: https://brainly.com/question/24341712
Find the maximum profit and the number of units that must be produced and sold in order to yield the maximum profit. Assume that revenue, R(x), and cost, C(x), are in thousands of dollars, and x is in thousands of units. R(x) = 9x – 2x², C(x) = x2 – 5x² + 4x + 1 The production level for the maximum profit is about units. (Do not round until the final answer. Then round to the whole number as needed.)
Answers
To find the maximum profit and the corresponding production level, we need to determine the quantity that maximizes the difference between revenue and cost. The profit function, P(x), can be expressed as P(x) = R(x) - C(x).
Given that R(x) = 9x - 2x^2 and C(x) = x^2 - 5x^2 + 4x + 1, we can substitute these equations into the profit functionTo find the maximum profit, we need to find the vertex of the quadratic function. The x-value of the vertex can be determined using the formula x = -b / (2a), where a = 4 and b = 5.Now, substituting this x-value back into the profit function, we can find the maximum profit:Performing the calculations, we can find the maximum profit.The production level for the maximum profit corresponds to the x-value of the vertex, which is approximately -5/8 (or 0.625 when rounded to the nearest thousand units). Therefore, the production level for the maximum profit is about 625 units.
learn more about maximum here:
https://brainly.com/question/13057754
#SPJ11