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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

#SPJ1

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At the end of 2020, Oriole Co. has accounts receivable of $775,800 and an allowance for doubtful accounts of $71,100. On January
Nataly [62]

Answer:

January 24, 2021 (write off)

Dr Allowance for Doubtful Accounts account 7,200

Cr Accounts Receivable account 7,200

 

March 4, 2021 (write off reversing)

Dr Accounts Receivable account 7.200

Cr Allowance for Doubtful Accounts account 7,200

March 4, 2021 (record collection)

Dr Cash account 7,200

Cr Accounts Receivable account 7,200

6 0
3 years ago
1. Which of the following is not a reason that women have traditionally received less pay for doing the same work as men?
Ksivusya [100]

Answer:

I think it might be B. or C. If I was taking this, I would pick C. Let me know if I was right!

Explanation:

4 0
3 years ago
A stock is selling at $40, a 3-month put at $50 is selling for $11, a 3-month call at $50 is selling for $1, and the risk-free r
aalyn [17]

Answer:

$0.745

Explanation:

GIven that

Current stock price  S_o = $40

strike price  X = $50

time to expiry of option = 3 - month

put price option P _o = $11

call price option C_o = $1

and the risk-free rate r = 6%

The amount that can be made on the arbitrage can be evaluated as a function of the Put-call parity.

i.e For parity ;

C_o + (X \times e^{-rt} ) = P_o + S_o

1 + (50 \times e^{-(0.06 \times 0.25} ) = 11 + 40

1 + (50 \times 0.9851 ) = 51

1 + (49.255 ) = 51

50.255 = 51

the difference in both values above illustrates that there is no  parity taking place and the arbitrage estimation here = 51 - 50.255 = $0.745

3 0
3 years ago
Cullumber Manufacturing Company purchased 14600 switches to make 6300 units. The standard allows for 2 switches per unit. The co
earnstyle [38]

Answer:

d. $1,875 unfavorable

Explanation:

Direct material quantity variance is computed as;

= (AQ - SQ) × SP

AQ = Actual quantity = 6,300 units

SQ = Standard quantity = 14,200 / 2 = 7,300 units

SP = Standard price = $0.80

Direct material quantity variance

= (6,300 - 7,300) × 0.80

= -1,000 × $0.80

= -1,875 unfavorable

3 0
3 years ago
The process of predicting what the market would pay for a company's investments and bonds is .
sweet-ann [11.9K]

The process of predicting what the market would pay for a company's investments and bonds is called a <u>valuation</u>.

Valuation is a quantitative process which determines what the market would pay for a company or its assets like investments and bonds. They may be valued on an absolute basis or on a relative basis compared to similar companies or assets. An analyst does this by placing value on many metrics.

Methods of valuation may differ and may provide different answers. Some methods that may be employed are Fundamental analysis, capital asset pricing model (CAPM) and dividend discount model (DDM).

<u>The other options are incorrect because:</u>

  • An appraisal is just an estimation of the market value of a company or its assets and is only used as a pricing guide.
  • Financial management is the practice of planning, obtaining, managing and administering funds in a business.
  • Assessment is the act of judging the value, amount or importance of a thing.

You can learn more about bond values at

brainly.com/question/26376004

#SPJ4

<u>The complete question is given below:</u>

" the process of predicting what the market would pay for a company's investments and bonds is .

  • Valuation
  • Appraisal
  • Financial Management
  • Assessment    "

4 0
1 year ago
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