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motikmotik
2 years ago
6

You buy a security that will pay you $500 in 1 year. You pay $455 today. If you hold this security to maturity, your yield to ma

turity is ____ while your rate of return is ______.
Business
2 answers:
aalyn [17]2 years ago
6 0

The yield to maturity would be 9.89% while your rate of return is 9%

<h3>What is Yield to Maturity?</h3>

This refers to the accumulated rate of return of an investment made on a bond after payment of the principal.

<h3>How to Calculate:</h3>

Given that:

  • Face value of security = $500
  • Price paid today = $455

Then, the yield to maturity = (Face Value/Current Price) x (1/Years to Maturity) - 1

= $500/$455 x 1/1 - 1

= 0.0989

This means that if you hold this security to maturity, the yield to maturity would be 9.89% while the rate of return is 9%.

Read more about yield to maturity here:

brainly.com/question/26376004

Elis [28]2 years ago
3 0

If you hold this security to maturity, your yield to maturity is <u>9.89%</u> while your rate of return is <u>9%</u>.

<h3>What is the yield to maturity?</h3>

The yield to maturity (YTM) refers to the total rate of return earned by a bond when it makes all interest payments and repays the original principal.

YTM is equal to a bond's internal rate of return (IRR) if the bond were held to maturity.

<h3>Data and Calculations;</h3>

Face value of security = $500

Price paid today = $455

Yield to maturity = (Face Value/Current Price) x (1/Years to Maturity) - 1

= $500/$455 x 1/1 - 1

= 0.0989

OR

Yield in dollars = $45 ($500 - $455)

= 0.0989 ($45/$455 x 100)

Rate of return = 9% ($45/$500 x 100)

Thus, if you hold this security to maturity, your yield to maturity is <u>9.89%</u> while your rate of return is <u>9%</u>.

Learn more about yield to maturity and rate of return at brainly.com/question/5524579

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Suppose your grandma sends you $100 for your birthday and you deposit $100 into your checking account at the local bank. The res
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Answer:

$90; $900

Explanation:

Given that,

Amount of deposits = $100

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Required reserves:

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= $100 × 10%

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Excess reserves = Deposits - Required reserves

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3 years ago
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Net Zero Products, a wholesaler of sustainable raw materials. Prepared the following aging of receivables analysis.
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Answer:

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a) The balance of the Allowance for Doubtful Accounts using the aging of accounts receivable method is $4,300.

b) Adjusting Entry to record bad debt expense:

Debit Bad Debt Expense $1,700

Credit Allowance for Doubtful Accounts $1,700

To record the bad debt expense for the period and bring the allowance to $4,300 credit balance.

Explanation:

a) Data and Calculations:

Aging of receivables analysis:

Total (days)                          0        1 to 30     31 to 60     61 to 90     above 90

Accounts receivable $171,000   $96,000   $34,000     $15,000     $12,000

Percent uncollectible                      1%            4%                 6%            9%

Allowance for doubtful     0          $960        $1,360         $900        $1,080

Total allowance for doubtful = $4,300 (960 + 1,360 + 900 + 1,080)

b) The adjustment in the Allowance for Doubtful Accounts needed for the current period is $1,700 ($4,300 - $2,600).  This amount will be debited to the Bad Debts Expense account and credited to the Allowance for Doubtful Accounts.  It will bring the total for the Allowance for Doubtful Accounts to $4,300 from $2,600.

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