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2 years ago

The relationship between bond price and yield to maturity is convex. Therefore?

1 answer:

6 0

Since the bond price and yield to maturity is convex, we can state that convexity is a better measure for calculating the effect on the bond rates where large fluctuations are noticed in the interest rates.

A bond price refers to the discounted value of the bond that is calculated at present. To calculate the bond price, we need to calculate the discounts on the future money flow.

The bond yield refers to the discount rate calculated upon the future cash flow. It is by this discount that the bond price is calculated.

While looking at the graphs of bond price and bond yield, the term convexity is used to show the curvature of the relation between them.

The bond price and bond yield follow an inversely proportional relation. If the bond price increases, the bond yield decreases. Similarly, if bond price decreases, bond yield increases.

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Journalize the following selected transactions for January. Journal entry explanations may be omitted.

ludmilkaskok [199]

Answer:

Jan. 1 Received cash from the investment made by the owner, $14,000.

Dr Cash 14,000

Cr Capital, owner 14,000

Jan. 2 Received cash for providing accounting services, $9,500.

Dr Cash 9,500

Cr Service revenue 9,500

Jan. 3 Billed customers on account for providing services, $4,200.

Dr Accounts receivable 4,200

Cr Service revenue 4,200

Jan. 4 Paid advertising expense, $700.

Dr Advertising expense 700

Cr Cash 700

Jan. 5 Received cash from customers on account, $2,500.

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Cr Accounts receivable 2,500

Jan. 6 Owner withdrew $1,010.

Dr Withdrawals 1,010

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7 0

3 years ago

hich of the following is NOT one of the six questions that comprise the task of evaluating a company's resources and competitive

Vadim26 [7]

Answer:

The correct answer is "What are the company's most profitable geographic market segments?"

Explanation:

In order to research on the companys' resource and competitive position, a researcher does not need to ask questions related to the geographic market segments.

Geographic market segments refer to the geographical spread of the market of a company.

I hope the answer is helpful.

Thanks for asking.

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3 years ago

The first thing that the customer needs to do to take a loan is

Anarel [89]

Is a bank account because how their going to take a loan with no bank account

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3 years ago

Based on the free cash flow valuation model, bizzaro co.'s value of operations is $300 million. the balance sheet shows $20 mill

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3 years ago

What rule is important to remember when evaluating risk and return? The higher the risk, the higher the potential return. The hi

andrew-mc [135]

Answer: The higher the risk, the higher the return.

Returns from an investment refers to the gains or losses over a specified period, and is quoted as percentage.

Risk refers to the possibility or the chance that the actual return that is earned is greater than or less than the return expected by the investor. Thus, uncertainty is another name for risk.

If the returns from an investment are certain, the risk involved is low. When risk is low, the returns are also low. For e.g. the return from a T-bill is low because the risk of default is zero, since the government can print money to fund its debt.

The higher the level of risk involved, the greater the potential for a higher return.

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4 years ago

Read 2 more answers