An investor is considering the purchase of a(n) 7.250 %. 18-year corporate bond that's being priced to yield 9.250%. She thinks that in a year, this bond will be priced in the market to yield 8.250%. Using annual compounding, find the price of the bond today and in 1 year. Next, find the holding period return on this investment, assuming that the investor's expectations are bome out. The price of the bond today is $420.91 (Round to the nearest cent.)

Answers

Answer 1

Corporate bond Price = (Coupon Payment / (1 + Yield/100)^1) + (Coupon Payment / (1 Yield/100)^2) + ... + (Coupon Payment + Face Value / (1 + Yield/100)^n)

Where:

Coupon Payment = Annual coupon payment

Yield = Yield to maturity

n = Number of years

Given information:

Coupon Payment = 7.250% of the Face Value

Yield to maturity = 9.250%

Face Value = $100 (Assuming a face value of $100 for simplicity)

a. Price of the bond today:

Using the provided yield to maturity of 9.250% and 18-year maturity:

Price today = (7.250 / (1 + 9.250/100)^1) + (7.250 / (1 + 9.250/100)^2) + ... + (7.250 + 100 / (1 + 9.250/100)^18)

Price today = (7.250 / (1.0925)^1) + (7.250 / (1.0925)^2) + ... + (7.250 + 100 / (1.0925)^18)

Evaluating the above expression will give us the price of the bond today.

Using the provided price of the bond today as $420.91, we can check if it matches the calculated price.

b. Price of the bond in 1 year:

Using the expected yield of 8.250% in 1 year:

Price in 1 year = (7.250 / (1 + 8.250/100)^1) + (7.250 / (1 + 8.250/100)^2) + ... + (7.250 + 100 / (1 + 8.250/100)^18)

Price in 1 year = (7.250 / (1.0825)^1) + (7.250 / (1.0825)^2) + ... + (7.250 + 100 / (1.0825)^18)

Evaluating the above expression will give us the price of the bond in 1 year.

c. Holding Period Return:

The holding period return is the total return earned from an investment over a specific period, including both capital gains and coupon payments.

Holding Period Return = (Price in 1 year - Price today + Coupon Payments) / Price today

We can calculate the holding period return using the calculated prices and the coupon payment of the bond.

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Related Questions

Gives details about the firm’s sales, costs, and profits for the past accounting period.

Answers

Financial statements are used by the management of an organization to convey a picture of the organization's current financial position. These statements are used to provide stakeholders with information about a company's assets, liabilities, and equity.

The Profit and Loss Statement, also known as an income statement, summarizes a firm's sales, costs, and profits for a specified period. It is the report that reflects a company's financial performance over a specified period. It is also the only document that offers information about income and expenses over the financial period.A P&L statement is designed to provide a clear understanding of an organization's financial results and revenue-generating activities. It is a financial statement that reports an organization's revenues and expenses over a specified period.

A P&L statement is broken down into several different categories, including operating costs, sales revenue, and other sources of income. A company's P&L statement will offer important insights into how profitable the organization is, which will help stakeholders make informed decisions. It also indicates the firm's total revenue, expenses, and profit over the financial year. Finally, the firm’s P&L statement may reveal any shortcomings or possible opportunities for improvement, as well as the trends in revenue and expenses over the financial year. Hence, it is an essential statement for an organization.

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Final answer:

The question refers to an income statement, a financial statement summarizing a company's sales (revenues), costs (including COGS and operating expenses), and profits (net income) during a past accounting period.

Explanation:

When discussing a firm's sales, costs, and profits during a past accounting period, you'll generally be analyzing what is known as an income statement. This is a financial statement that provides a summary of a company's financial performance over a specific period. Typical items on an income statement include revenues, cost of goods sold (COGS), and profit or loss for the period.

Revenues refer to the firm's sales, whereas COGS usually includes the direct costs attributable to the production of the goods or supply of services that the company sells. The difference between revenues and COGS is Gross Profit. After taking into account all operating expenses, such as administrative and marketing costs, any resulting value is the firm's operating profit. Once non-operating expenses, taxes, and interest have been subtracted, the remaining value is the net profit or net income. The net income is a measure of the firm's profitability for the given accounting period.

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When creating a résumé, other experiences should be included only if they are relevant to the job objective.truefalse

Answers

When creating a résumé, other experiences should be included only if they are relevant to the job objective. true

Why is it crucial to just include information that is relevant on your resume?

Recruiters want to be certain that you are serious about the position and are not simply flooding the internet with applications for every open position. This implies that if you have a lot of expertise in other, unrelated subjects, you might want to opt to concentrate exclusively on those that are specifically relevant to the career or field you seek.

Employers may learn more about you, see your qualifications, and request an interview by reviewing your resume.

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Replace the three forces which act on the bent bar by a force-couple system at the support point A. Then determine the x-intercept of the line of action of the stand-alone resultant force R. The couple is positive if counterclockwise, negative if clockwise. Answers: Force-couple system at A R=(∣ i+ j) Ib MA​= lb⋅ft Stand-alone resultant x= ft

Answers

The x-intercept of the line of action of the stand-alone resultant force R is 6 feet.

To replace the three forces acting on the bent bar with a force-couple system at the support point A, we need to determine the resultant force and the resultant couple moment.

Resultant Force:

The resultant force R is obtained by adding the individual forces together:

R = 6 lb i + 4 lb j

R = 6 lb i + 4 lb j

Resultant Couple Moment:

To calculate the resultant couple moment MA, we need to find the moment of each force about point A and then add them together:

MA = (3 ft × 4 lb) + (2 ft × 6 lb)

MA = 12 lb⋅ft + 12 lb⋅ft

MA = 24 lb⋅ft

X-Intercept of the Line of Action of Resultant Force:

To find the x-intercept of the line of action of the stand-alone resultant force R, we need to divide the moment MA by the y-component of R:

x = MA / (4 lb)

x = 24 lb⋅ft / 4 lb

x = 6 ft

Therefore, the x-intercept of the line of action of the stand-alone resultant force R is 6 feet.

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What were the most important factors that led to the midwest becoming known as the rust belt?

Answers

The Rust Belt became an industrial hub due to its proximity to the Great Lakes, canals, and rivers, which allowed companies to access raw materials and ship out finished products. These were the most important factors.

1, xyz company cost function for the next four month is cost =500000+5Q A, find the BE dollar volume of sale is the selling price is birr 6/unit B, what would be the company cost is it decides to shutdown operation for the next four month

Answers

Answer:

Break Even point Q = 500000

Shut Down Point P < 5

Explanation:

Break Even point is where Total Revenue = Total Cost.

Total cost = 500000 + 5Q, price = 6 (Given) , Total revenue = Price x quantity  

So, TR = TC implies : 500000 + 5Q = 6Q → 500000 = 6Q - 5Q

Q = 500000

Shut Down Point is where firm's Price is < its Average Variable Cost .  

AVC is the variable cost on per unit output, is found out by average of variable component of cost function. C = 500000 + 5Q implies variable cost = 5Q , so AVC = 5Q / Q = 5

So, the firm would shut down if its price would go below AVC , ie if P < 5

How does a production possibilities model differ from a budget constraint model?
A. The production possibilities model depicts purchase choices
B. The budget constraint model demonstrates diminishing returns
C. The production possibilities model demonstrates diminishing returns

Answers

A. The production possibilities model depicts purchase choices

The production possibilities model and the budget constraint model are both economic models used to analyze choices and trade-offs. However, they differ in terms of the specific scenarios they depict and the concepts they illustrate.

The production possibilities model represents the different combinations of two goods or services that an economy can produce given its available resources and technology. It shows the maximum output possibilities along the production frontier, illustrating the trade-offs between producing one good versus another. The model helps to understand the concept of scarcity and the opportunity cost of allocating resources to different production options. It does not directly involve purchase choices but focuses on production and allocation decisions.

On the other hand, the budget constraint model is used to analyze consumer choices and spending decisions. It represents the various combinations of goods and services a consumer can afford based on their income and the prices of the goods. The model illustrates the trade-offs between purchasing different goods and the constraints imposed by the consumer's budget. It helps to understand how consumers allocate their limited income to maximize their utility or satisfaction.

The production possibilities model and the budget constraint model differ in terms of the scenarios they depict. The production possibilities model focuses on the choices and trade-offs in production and allocation of resources, while the budget constraint model analyzes consumer choices and spending decisions based on income and prices.

Therefore, the correct answer is A) The production possibilities model depicts purchase choices.

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What is one issue on which economists commonly disagree?give an example of each argument?

Answers

Answer:

quality and price of product

can someone help me with this please.

Answers

There’s no image I think u forgot to insert it

Answer:

sure

Explanation:

no image

What is a cover letter?

Answers

Answer:

A clover letter is a letter that you usually turn in with your resume and it usually has more detailed information about your skills and why you're good for the job.

Explanation:

Answer:

A clover letter is a letter that you usually turn in with your resume and it usually has more detailed information about your skills and why you're good for the job.

Explanation:

The nurse manager on a pediatric intensive care unit wants to evaluate patient satisfaction. The nurse manager understands that ultimately, positive relationships with consumers of care are evaluated by the:
a. Cultural sensitivity of staff.
b. Cost-effectiveness of care delivery.
c. Economic value of service.
d. Outcomes for clients and their perceptions of care.

Answers

The nurse manager in a pediatric intensive care unit can evaluate positive relationships with consumers of care by assessing the outcomes for clients and their perceptions of care.

When evaluating patient satisfaction and positive relationships with consumers of care, the nurse manager should focus on assessing the outcomes for clients and their perceptions of care. This involves evaluating the effectiveness of the care provided and how well it meets the needs and expectations of the patients and their families. By measuring outcomes such as improved health, reduced complications, and overall satisfaction with the care received, the nurse manager can gauge the success of the care delivery. Additionally, understanding and addressing the perceptions of care from the patient's perspective is essential in building positive relationships.

This includes factors such as communication, empathy, cultural sensitivity, and the overall experience of the patients and their families. By prioritizing outcomes and perceptions of care, the nurse manager can evaluate and enhance patient satisfaction, leading to better relationships and quality of care in the pediatric intensive care unit.

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The rise or fall in the price of an item is an.example of which of the following?
O Inflation risk
O Personal risk
O Income risk
O Interest rate risk

Answers

Answer:

Inflation risk

Explanation:

I am taking a class this right now

Answer:

income risk

Explanation:

i do the test

thanks to donations from merchants in the community, an after-school club for disadvantaged children has introduced a new promotion: those who maintain a b average for the school year will each receive $100 in gift certificates from local businesses, such as an ice-cream parlor and a clothing store. this is an example of

Answers

This initiative can be seen as an example of  Option A. incentivizing academic achievement.

By offering gift certificates to students who maintain a B average for the school year, the after-school club is creating a system of rewards to motivate and encourage the children to excel academically.

The donations from local businesses serve as a means to provide tangible incentives for the students, giving them a direct benefit for their hard work and dedication.

By linking academic success with the opportunity to receive gift certificates, the after-school club is reinforcing the value of education and emphasizing the importance of maintaining good grades.

This not only motivates the disadvantaged children to strive for better academic performance but also instills in them a sense of accomplishment and self-worth.

Moreover, this initiative also has a positive impact on the community as a whole.

By collaborating with local merchants, the after-school club is promoting community engagement.

The donations from these businesses demonstrate their commitment to supporting educational opportunities for disadvantaged children.

This partnership fosters a sense of unity and shared responsibility among community members, as they collectively work towards uplifting the underprivileged youth.

In conclusion, the promotion of providing $100 gift certificates to students who maintain a B average is an example of incentivizing academic achievement while simultaneously promoting community engagement.

By doing so, the after-school club aims to inspire and empower disadvantaged children while fostering a stronger and more supportive community.

Therefore, the correct Option is A.

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The probable question may be:

"Thanks to donations from merchants in the community, an after-school club for disadvantaged children has introduced a new promotion: those who maintain a B average for the school year will each receive $100 in gift certificates from local businesses. This is an example of (a) incentivizing academic achievement, (b) promoting community engagement, or (c) fostering entrepreneurial skills?"

What does a mission statement do?

A) tells your business concept.
B) reflects the purpose of the company.
C) tells the major goals of a business.

PLEASE ANSWER

Answers

I think C) tells the major goals of a business

Hope it helped

What is the marginal revenue and marginal cost for this diagram?

What type of market is this? Explain your answer

What is the marginal revenue and marginal cost for this diagram?What type of market is this? Explain

Answers

Marginal revenue :

2060120200300420560

Marginal cost :

108210192640

It is a Monopolistic market structure because marginal revenue is greater than the marginal cost.

Marginal Revenue is the increase in the revenue by selling one extra product in the market. It is calculated by the Change in revenue divided by the change in output.

Marginal cost is the change in cost by producing one extra unit of output. It is calculated by a change in cost divided by the change in units.

Monopolistic market structure is where there are multiple companies producing similar products in the market.Example for monopolistic structure can be a grocery store.

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For what reason can you infer that it might be relevant for a policy analyst to have a law degree?
A) Departments of education are in the executive branch, and most executive-branch officials have law degrees.
B) Policy analysis is a volatile job market, and it is helpful to have another field to fall back on.
C) Education policy needs to be enacted into law by our legislators and needs to comply with other state and federal laws.
D) Policy analysts tend to get sued by ideological foes, so legal knowledge is good protection.

Answers

Explanation:

i think is answer b.....m.

Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called Group of answer choices auditing. economics. finance. accounting.

Answers

Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called accounting.

Accounting is a fundamental process in business and financial management. It involves systematically recording financial transactions, classifying them into appropriate categories, and summarizing the information to create financial statements such as the income statement, balance sheet, and cash flow statement. These financial statements provide a snapshot of a company's financial performance, position, and cash flows, enabling decision-makers to analyze and make informed decisions about the organization's operations, investments, and financial strategies.

While auditing, economics, and finance are related disciplines, each has its own distinct focus. Auditing involves examining and evaluating financial records and statements to ensure accuracy, compliance, and reliability. Economics studies the production, distribution, and consumption of goods and services within an economy. Finance, on the other hand, focuses on managing financial resources, investments, and the financial aspects of decision making. However, accounting serves as the foundation for providing the necessary financial information in these areas.

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Read the statements below. Select "L" if the statement describes the Linux OS. Select "M" if the statement describes the Mac OS. Select "W" if the statement describes the Windows OS.

L - Linux
M - Mac
W - Windows

___code can be modified by users

____customer service provided by volunteers

___introduced the first GUI

___open source

____used by the majority of businesses

_____widely used in artistic fields

Answers

L - LinuxM - MacW - WindowsL - Linux

All the above statements describe Linux OS.

"Code can be modified by users" refers to the open-source nature of Linux."Customer service provided by volunteers" can be interpreted as a reference to the community-driven support for Linux."Introduced the first GUI" is not accurate, as the first GUI was actually introduced by Xerox PARC, but Linux certainly played a role in popularizing the use of GUIs in computing."Open source" refers to the fact that Linux's source code is freely available for users to view, modify, and distribute.

Inline Content: Site 1

lick to review the online content. Then answer the question(s) below, using complete sentences. Scroll down to view additional question

ive an example of a process that may need flowchart to clarify procedures. Provide details to help explain your answer.

Answers

One example of a process that may need a flowchart to clarify procedures is the customer complaint resolution process in a retail store.

This process typically involves multiple steps, such as receiving the complaint, assessing the issue, escalating it to the appropriate department, investigating, and providing a resolution to the customer. By creating a flowchart, the various steps and decision points in the process can be visually represented, including who is responsible for each task and the communication flow between departments.

This helps clarify the sequence of actions, potential bottlenecks, and areas for improvement. The flowchart provides a clear and standardized guide for employees, ensuring consistent and efficient handling of customer complaints.

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Which economic group in the U.S. is likely to benefit the most from falling oil and gas prices?
Why?

Answers

Answer:

i make a lot of gas so the prices can go down for everyone

Explanation:

How should oil companies react if oil prices rise to the $90 to $100 per barrel level? Explain your reasoning

Answers

Answer:

Explanation:

Oil price increases are generally thought to increase inflation and reduce economic growth. In terms of inflation, oil prices directly affect the prices of goods made with petroleum products. As mentioned above, oil prices indirectly affect costs such as transportation, manufacturing, and heating.

What is the Controlled Entity for the FCF in Bubble 27 on the
Stepped Pin Demo
drawing?

Answers

The Controlled Entity for the FCF in Bubble 27 on the Stepped Pin Demo drawing is the "Stepped Pin Assembly," as it is the entity that the FCF controls to regulate the movement of the stepped pin.

The Controlled Entity for the FCF in Bubble 27 on the Stepped Pin Demo drawing is the "Stepped Pin Assembly". This is because the FCF is used to control the movement of the stepped pin, and the stepped pin assembly is the only entity that the FCF can control.

The Stepped Pin Assembly is made up of the following components:

A stepped pin

A housing

A spring

A stop

The stepped pin is the main component of the assembly. It is a long, thin pin that has a series of steps along its length. The steps allow the pin to move in a controlled manner.

The housing is the part of the assembly that holds the stepped pin. It is made of a strong material, such as metal, to prevent the pin from moving too far.

The spring is located between the housing and the stepped pin. It helps to keep the pin in place and prevents it from moving too far.

The stop is located at the end of the housing. It prevents the pin from moving past a certain point.

The FCF is used to control the movement of the stepped pin. It does this by sending a signal to the stepper motor, which then turns the stepper motor. The stepper motor then turns the threaded rod, which then moves the stepped pin.

The FCF can only control the movement of the stepped pin because it is the only entity that is connected to the stepper motor. The other components of the Stepped Pin Assembly are not connected to the stepper motor, so the FCF cannot control them.

Therefore, the Controlled Entity for the FCF in Bubble 27 on the Stepped Pin Demo drawing is the "Stepped Pin Assembly".

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Scholarships awarded for high GPAs or test scores are based on _____.

Answers

Answer:  Merit-based...

Regina a 25-year-old professional who wants to start an investment portfolio what strategy may her financial advisor suggest

Answers

Explanation:

For a young professional like Regina still in her 20's. Majority of the amount must go in high risk but high return investment tools like stocks. Some amount in low risk tools like bonds or government securities.Since Regina has more time to absorb changes in the market, she can focus on more aggressive growth stocks and avoid slow-growing assets like bonds.  What i as an investment advisor would suggest her

Stocks: 80% to 90%

Bonds: 10% to 20%

When applying for jobs you should never skip reading the

Answers

Looking at a collection of written symbols and deriving meaning from them is the act of reading. When we read, our brains translate the written symbols—letters, punctuation, and spaces—that our eyes see into words, sentences, and paragraphs that make sense to us.

Regardless of the academic subject, whether it be language arts or even maths, reading is crucial and acts as a fundamental building block for learning. Reading is an essential life ability, as seen by the necessity to read items like street signs and medications in daily life. Reading makes the brain stronger and enhances memory.

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Ahmad has some saving where do you suggest him to keep and why​

Answers

Answer:

It depends on how much money Ahmad has saved.

Explanation:

If he has a small amount of money, the best he can do is to put his savings on a safe investment, like treasury bonds, an ETF, or a safe and low risk bond of a trustworthy company.

If Ahmad has a larger amount of money, he can put his savings in riskier assets like stock, which could give him a higher return. He could also create a more diverse investment portfolio, with some of his savings going to safer, lower yield investment instruments, and the rest going to riskier, higher yield investment instruments.

If manufacturing overhead has been underallocated during the​ period, and most of the jobs produced have been​ sold, then:_________

Answers

If manufacturing overhead has been underallocated during the period, and most of the jobs created have been sold, then "the cost of goods sold reported on the income statement will be lower than the actual cost".

This is because the underallocated overhead will not have been fully absorbed into the cost of the products, leading to an understated cost of goods sold and an overstated gross profit. As a result, the company's financial performance will appear better than it actually is. This could have negative consequences for the company, such as reducing its ability to secure financing or make investment decisions based on inaccurate financial information.

To correct the situation, the company would need to allocate the underallocated overhead to the appropriate products, which would result in a restatement of the cost of goods sold and a corresponding adjustment to the gross profit.

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All the following statements concerning term insurance are correct EXCEPT: Group of answer choices Most policies can be renewed for additional periods without evidence of insurability. Most policies can be converted to a permanent life insurance policy. Most policies have a nonforfeiture benefit to refund a portion of a policy's cash value when coverage stops. The insurance provides protection for a certain period of time.

Answers

Answer: Most policies have a nonforfeiture benefit to refund a portion of a policy's cash value when coverage stops.

Explanation:

Term insurance is a type of life insurance policy whereby the policy owner will be given coverage for a particular time period.

It should be noted that term insurance can be renewed for additional periods without evidence of insurability and can also be converted to a permanent life insurance policy.

The option that most policies have a nonforfeiture benefit to refund a portion of a policy's cash value when coverage stops is not true.

why was william morris unable to implement his plan for radical reform of industry and design? can you cite any contemporary examples of a similar disconnect between theory and practice?

Answers

William Morris  creations were so attractive they were difficult to produce in large quantities, it can be created more quickly, beauty needed to be simplified.

The required details about William Morris is mentioned in below paragraph.

British textile designer, poet, painter, author of science fiction, preservationist of historic buildings, printer, translator, and socialist activist William Morris was a member of the British Arts and Crafts Movement. He made a significant contribution to the resurgence of old British textile production techniques and arts. In his own era, William Morris was best renowned for creating wallpaper, textiles, and carpet designs, as well as for writing The Earthly Paradise. Since the middle of the 20th century, Morris has been praised for his creativity and skill as a maker.

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find the area of the squarewhose perimeter is 224cm

Answers

Answer:

3,136

Explanation:

area=3,136 hope that this helps you .I think that's the answer

find the area of the squarewhose perimeter is 224cm

Which is an example of a federal government transfer payment?
o payment to cia and fbi operatives
payment to automobile union members
o payment to federal court justices
o payment to individuals with disabilities

Answers

Payment to individuals with disabilities
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