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Anna71 [15]
1 year ago
10

Is there a relationship between a financial asset and its interest rate? the interest rate on a financial asset _______

Business
1 answer:
Zinaida [17]1 year ago
4 0

The cost of a financial asset and its interest rate are inversely correlated. An investment's interest rate decreases as its value increases. Similar to this, an asset's price increases when its interest rate decreases.

Thus, there is an inverse relationship between financial assets and their interest rate.

<h3>What Is a Financial Asset? </h3>

A financial asset is a liquid asset with value derived from a legal claim to ownership or a contractual right. Financial assets include, among other things, cash, investments in stocks, bonds, mutual funds, and bank deposits.

Assets that facilitate the movement of money. They move money from those who have extra money to those who have not, whether they are people, businesses, or even the government.

A promise or claim on future money is what financial assets are. A financial asset or liability is first valued at fair market value. The type of financial instrument will determine how the subsequent measurement is done. The amortized cost and fair value are both used to measure various categories.

For more information about Financial Asset refer to the link:brainly.com/question/15071910

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Answer:

bonds' face value $180,000

coupon rate 8%, semiannual = 4%

maturity 3 years x 2 = 6 periods

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the journal entry to record the issuance of the bonds:

January 1, 2017, bonds issued at a discount

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the amortization of the bond discount should be $9,138 / 6 = $1,523 on every coupon payment.

Journal entry to record payment of first coupon:

June 30, 2017, first coupon payment

Dr Interest expense 8,723

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3 years ago
Matt is saving to buy a new motorcycle. if he deposits ​$75 at the end of each month in an account that pays an annual interest
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The treasurer of Riley Coal Co. is asked to compute the cost of fixed income securities for her corporation. Even before making
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Answer: (a) 6%

(b) 10.61%

(c) Yes

Explanation:

a) After tax cost of debt = Yield (1- tax)

= 8 ( 1 - 0.25)

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b) cost\ of\ preferred\ stock =\frac{dividend}{price-flotation\ cost}

cost\ of\ preferred\ stock =\frac{5.20}{52-3}

cost\ of\ preferred\ stock =\frac{5.20}{49}

= 0.1061 or 10.61%

Note:  Cost of preferred stock is not tax deductible

c),Yes the treasurer is correct ,The cost of debt is 5% less than cost of preferred stock [10.61 - 6 = 4.61%]

8 0
3 years ago
Lily operates a gift shop and has a lot of inventory to manage. She counts inventory once every 4 weeks. Preparing and placing o
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Answer:

12 weeks

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The computation of the needs period is shown below":

= Number of weeks inventory counts once + number of order cycles takes + number of the week taken for arrive

= 4 weeks + 2 weeks + 6 weeks

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We simply added the total number of weeks that is mentioned in the question so that the needs period could be computed

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3 years ago
At the break-even point of 1000 units, variable costs are $60000, and fixed costs are $35000. How much is the selling price per
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Answer:

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Explanation:

The computation of the selling price per unit is shown below:

Selling price per unit is

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And, the break even point is 1,000 units

So, the selling price per unit is

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Therefore, the selling price per unit is $95

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