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Katen [24]
2 years ago
14

3. A 9.3% annual coupon bond with a 10-year maturity and a $1,000 par value has a yield to maturity of 8%. Assuming that the yie

ld curve is flat and doesn’t shift, calculate the holding period return you would achieve from buying the bond, holding it for one year only.
Business
1 answer:
aliina [53]2 years ago
3 0

Holding period return is 8.000%

Price at the time of purchase=

1000*9.3% 8(1/1.08^10)+1000/1.08^10=1087.231058

Price at the time of sale=

1000*9.3%/8%*(1-1/1.08^9)+1000/1.08^9=1081.209543

Holding period return=

(1081.209543+1000*9.3%)/1087.231058-1=8.0000%

Coupon bonds, also known as bearer bonds or bond coupons, are debt securities with coupons attached that represent semi-annual interest payments. For coupon bonds, there is no record of the purchaser and issuer. The purchaser's name is not even printed on the certificate.

A coupon bond is a debt instrument with a removable piece of paper that can be peeled off the bond itself and taken to a bank or broker to pay interest. These removable pieces of paper are called coupons and represent interest payments to creditors.

Learn more about   coupon bonds here

brainly.com/question/26376004

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Hodgkiss mfg., inc., is currently operating at only 94 percent of fixed asset capacity. current sales are $740,000. how fast can
tangare [24]

Sales grow before any new fixed assets are needed is $156,480.

Fixed assets , additionally known as lengthy-lived assets or property, plant, and equipment, are a time period utilized in accounting for belongings and belongings that cannot without difficulty be converted into cash. fixed properties are one of a kind from modern assets, along with coins or bank accounts, due to the fact the latter is liquid belongings.

currently operating = 94 percent

current sales = $740,000

Full capacity sales = current sales/ Current capacity utilisation

                               = 500000/0.94

                               = $531,914.89

Percentage of fixed assets to full Capacity Sales = Fixed Assets / full Capacity Sales

                                                                                 = 400000/531914.89

                                                                                 = 0.752

Total Fixed assets Needed for New Sales = 74000*0.752

                                                                      = 556480

Additional Fixed Assets needed = 556480 - 400000

                                                      = $156,480   answer.

Learn more about fixed assets here:-brainly.com/question/25746199

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7 0
1 year ago
The present government has initiated the tax reforms such as relaxation of taxes on relaxing a property sales tax, and removal o
DochEvi [55]

Answer:

= the IS curve shifts right and the

economy moves along the LM curve

Explanation:

= the IS curve shifts right and the

economy moves along the LM curve= the IS curve shifts right and the

economy moves along the LM curve= the IS curve shifts right and the

economy moves along the LM curve

5 0
2 years ago
In what ways can labor and management resolve disputes
saul85 [17]

Answer:

understand

Explanation:

by understanding each other and work inline with the business goal in order to achieve the business objective

5 0
3 years ago
Gene is looking for a loan so that he can buy a car. There are a few different banks where he can apply for a loan. What should
ElenaW [278]

Answer:

The Answer To This Question is B. a good credit score.

Explanation:

8 0
2 years ago
You are opening a savings account that earns compound interest. Which compounding frequency will earn you the MOST money?
Ne4ueva [31]
In general, it is true that if the frequency is higher, then you make more money. For example, suppose you have a capital 1$ and the interest rate can be either 50% compunded annually or 25% compounded semiannually (same total interest in a year, different compounding rate). In the first case you get 1.5$ back at the end of the year, while in the second case after 1 semester you have 1.25$. After 2 semesters, you have 1.56$. You cannot make infinite money this way though; you can at most gain a factor of 2.7 by reducing the intervals of compounding.
The correct answer is the highest frequency, namely when the interest is compounded as frequently as possible (as long as the total interest rate is the same).
3 0
3 years ago
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