1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
erastova [34]
2 years ago
12

A 30-year maturity bond making annual coupon payments with a coupon rate of 12% has (Macauley) duration of 11.54 years and conve

xity of 192.4. The bond currently sells at a yield to maturity of 8%. a) Find the price of the bond if ytm falls to 7% (use financial calculator or spreadsheet).
Business
1 answer:
dsp732 years ago
7 0

The price of the bond if the yield to maturity falls to 7%, based on the period and amount will be $1,620.45.

<h3>What is the price of the bond at 7%?</h3>

We shall assume that the bond has a face value of $1,000.

The coupon is:

= 12% x 1,000

= $120

The price is:
= (Coupon x Present value interest factor of annuity, 30 years, 7%) + Face value of bond / ( 1 + rate) ^ number of periods

= (120 x 12.409) + (1,000 / (1 + 7%)³⁰)

= $1,620.45

Find out more on bond pricing at brainly.com/question/25596583.

You might be interested in
During the spring and summer of 2016, when gasoline prices were rising quickly, politicians in several countries proposed and a
vaieri [72.5K]

Answer:

consumers would find it cheaper to buy gasoline

Explanation:

In the short run a tax cut or tax suspension as we have In this question is able to increase demand because it increases peoples disposable income. This tax cut of $0.4 would remove burden on gasoline consumers. By removing the tax on gasoline the price of gasoline would become lower and consumers would find it easier and cheaper to purchase

5 0
4 years ago
For each of the following, compute the present value (Do not round intermediate calculations and round your answers to 2 decimal
Naya [18.7K]

Answer:

Present Value = Future Value / ( 1 + interest rate) ^ years

1. Present Value = 15,251 / ( 1 + 7%)¹³

= $6,328.62

2. Present value = 49,557 / (1 + 13%)⁴

= $30,394.24

3. Present value = 884,073 / ( 1 + 14%)²⁹

= $19,780.96

4. Present Value = 548,164 / (1 + 9%)⁴⁰

= $17,452.22

4 0
3 years ago
The dmv may impose certain restrictions on a driver license and, therefore, the driver; this is done to ensure the safe operatio
Veronika [31]
An example is driving only while wearing corrective lenses for eyesight. This is to ensure the driver can see the road and the other cars and pedestrians clearly to ensure his/her own safety and that of other drivers and pedestrians on the road.
6 0
3 years ago
irs guidelines require specific information to substantiate deductible automobile expenses. which 3 items are included in the su
mestny [16]

The three items that are included in the substantiation requirements are:

  • Date Placed in Service
  • The total mileage; and
  • Vehicle Type.

<h3>What is IRS guidelines?</h3>

Internal Revenue Service Guidelines are guidelines that individuals and corporates must follow in order to be compliant with the requirements of the IRS.

Thus, it is correct to indicate that according to the IRS Guidelines, the three items that are included in the substantiation requirements are:

  • Date Placed in Service
  • The total mileage; and
  • Vehicle Type.

Learn more about substantiation requirements at:
brainly.com/question/1297571
#SPJ12

4 0
2 years ago
David is trying to decide whether to add capital through investing more of his own money or through borrowing money from the ban
alukav5142 [94]

The return of equity will increase. Businesses can finance themselves with debt and equity capital. By aggregating the quantity of debt capital kin to its equity capital, a company can increase its return on equity. The way in which rising financial leverage increases ROE is a little less instinctive. One way to think about it is that if a business adds debt, its assets increase for the reason that its cash inflows from the debt issuance and so does its entire debt.

3 0
4 years ago
Other questions:
  • Linda and Richard are married and file a joint return for 2019. During the year, Linda, who works as an accountant for a nationa
    12·1 answer
  • Bill has just returned from a duck hunting trip. He brought home eight ducks. Bill’s friend, John, disapproves of duck hunting,
    9·2 answers
  • Because there are some positive aspects of bureaucracy, as proposed by Max Weber, Tammy, a restaurant manager, is interested in
    14·1 answer
  • Select which government was granted each of the powers listed. Coining of money Fire and police protection Schools Army and Navy
    11·1 answer
  • The measure of net income returned from every dollar invested in total assets is the:
    11·1 answer
  • 1 Carlos owns a private limited company called BettaBakers Limited. It produces
    10·1 answer
  • Jill has recently begun working at a local florist. In addition to creating floral arrangements, Jill spends a good deal of her
    15·1 answer
  • The spread is the difference between the bid and ask prices difference between the purchase and sale prices commission charged b
    13·1 answer
  • Promoción de fabricante y de establecimiento (diferencias)
    9·1 answer
  • Suppose there is an increase in both the supply and demand for personal computers. In the market for personal computers, we woul
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!