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pentagon [3]
1 year ago
14

A 5-year bond with a 10% coupon rate was purchased at $980 at issue and sold at $1020 by end of year 4. What is the investor's y

early rate of return? How does it compare to coupon rate and YTM?
Use a financial calculator and Excel to solve it
Business
1 answer:
Dimas [21]1 year ago
6 0

The yearly return of the investor is given to be 11.069%

<h3>How to find the YTM</h3>

In order to do this we have to make use of the Rate function in excel

This would be given as

=RATE(nper, PMT, PV, FV)

where Nper is 5 years

PMT is = $1,000*10% = $100

PV = $980

The future value Fv is given as $1,000

Hnece we would have to type in excel

RATE(5,100,-980,1000)

This would give us the value of the YTM as 10.5348%

Next would be to find the rate of return of this investor. This would be the rate that he actually earned.

We would also use the rate function

=RATE(nper, PMT, PV, FV

Npe = 4 years

PMT = $1,000*10% = $100

PV = $980

FV = $1,020 that is the amount for which the bond was sold

=RATE(4,100,-980,1020)

The solution would be = 11.0698%

Thus we can say that the return earned on investment is 11.0698%

Read more on YTM here

brainly.com/question/26376004

#SPJ1

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A false statement of material fact regarding ownership of business property that results in a loss of sales is referred to as __
fomenos

Answer:

D. Slander of title.

Explanation:

Slander of title occurs when someone publishes an untrue and disparaging statement about another person’s real property -- meaning a home, building, or parcel of land -- and the statement could have a negative impact on the property's value.

6 0
3 years ago
Household consumers are the most conspicuous audience in that most mass media advertising is directed at them. T/F
elena-14-01-66 [18.8K]

Answer:

The correct answer is True.

Explanation:

Local advertising is of capital importance, especially for those who want to spread their business in specific cities or geographic regions.  

With word of mouth advertising, you can surely get your business to reach different cities; but not at the speed that is required to recover the investment invested.

Businesses that have a local advertising plan will be able to bring their products and / or services to potential customers located in the target geographic area and increase their recognition as a local brand.

We are sure you have heard the following quotes; <em>"The best publicity is what satisfied customers do"</em> by Philip Kotler, and "What helps people helps business" by Leo Burnett

So why is local advertising important? Business owners have asked themselves this question for years, and the answer is really quite simple ...  To get attention, direct traffic to your business and close sales.

6 0
2 years ago
On January​ 1, 2017, Walker Sales issued​ $19,000 in bonds for​ $14,300. These are​ eight-year bonds with a stated rate of​ 13%,
AysviL [449]

Answer:

$14,887.5

Explanation:

Carrying Value of the bond is the net of Face value and any amortised discount on the bond.

Face Value of the bond = $19,000

Issuance Value = $14,300

Discount Value = $19,000 - $14,300 = $4,700

This Discount will be amortized over the bond's life until the maturity on straight line basis.

Amortization in each period = $4,700 / (8x2) = $293.75 semiannually

Until December 31, 2017 two payment have been made and $587.5 is amortized in the two semiannual periods.

Un-amortized Discount = $4,700 - $587.5 = $4,112.5

Carrying value of the bond  = Face value - Un-amortized Discount = $19,000 - $4,112.5 = $14,887.5

7 0
3 years ago
Old Time Savings Bank pays 3% interest on its savings accounts. If you deposit $1,800 in the bank and leave it there: (Do not ro
klasskru [66]

Answer:

A. $54

B. 55.62

C. $70.46

Explanation:

The formula for calculating compound interest is

FV = P (1 + r ) ^n

FV = Future value

P = Present value

R = interest rate

N = number of years

A. $1,800 (1.03) = $1854

Interest rate = $1854 -$1,800 = $54

B. $1,800 (1.03)^2 = $1,909.62

Interest rate = $1,909.62 - $1854 = $55.62

C. $1,800 (1.03)^10 = $2,419.05

To service the interest rate, we have to determine the future value in year 9

$1,800 (1.03)^9 = $2,348.59

Interest rate = $2,419.05 - $2,348.59 = $70.46

I hope my answer helps you

5 0
3 years ago
The relationship between increasing prices and decreasing money value is called
Lana71 [14]

Answer:

Inflation occurs when prices rise across the economy, decreasing the purchasing power of your money.

Explanation:

Can I please get on the brainlist

6 0
1 year ago
Read 2 more answers
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