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pentagon [3]
2 years 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]2 years 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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What phase of the product life cycle is this item in and how you know this? 3D TV
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Answer:The part of the life cycle to which the product belongs is that of Maturity.

Explanation:

Since with the established growth, the next stage in the life cycle is Maturity. Businesses at this stage add features that make the product differ from competitors entering the market.

5 0
4 years ago
Suppose you invest $20,000 of your own money in a business as a sole proprietor, and then borrow an additional $10,000 from a ba
vichka [17]

Answer:

The correct answer is $30,000.

Explanation:

According to the scenario, the given data are as follows:

Own investment = $20,000

Debt from bank = $10,000

As the business is sole proprietor, there is unlimited liability of the loss whether it is own investment or borrowed from a bank.

So, the total loss can be calculated as:

Total loss = Own investment + Debt from bank

= $20,000 + $10,000

= $30,000

Hence, the total loss is $30,000.

6 0
3 years ago
Decide for each item whether it is part of GDP and, if so, to which expenditure category it belongs.Purchase of 100 shares of Ge
love history [14]

Answer:

NO , 100 shares purchase of GMS is not included in GDP

Explanation:

GDP is gross value of final goods & services produced by an economy in its domestic territory during a financial year .

Purchase of 100 Shares of General Motor stock is not included in GDP : Because it does not lead to any new production of goods & services , is mere transfer of ownership from company to shareholders . Similarly , Debenture selling is also not included

It is analogous to the rule of excluding second hand goods from GDP , since they have not lead to any new goods / services & are mere transferred from one owner to another .

However , any Brokage fee / commission paid related to either of these is included because it is factor income for a productive intermediary service. Also , returns on shares i.e Dividend (or even Interest on debetures) are included - since these are factor income to factors of production (capital component share) .

4 0
4 years ago
During a typical evening, a pizzeria receives phone orders for pizza delivery at a constant rate: 18 orders in a typical 4 minut
liberstina [14]

Answer:

the phone order that will exceed $1000 end at 4+ 3hours 23mins = 7:23 PM

Explanation:

Given the following information for pizza delivery

phone orders : 18 orders in 4 minute.

1080 pies are sold in 4 hours

pizzeria starts taking orders at 4:00 PM

profit made = $11 on 10 orders.

When will phone order profit exceed $1,000?

phone orders : 18 orders in 4 minute.

1080 pies are sold in 4 hours

4.5 orders in 1 minute

profit made = $11 on 10 orders.

profit made = $1.1 on 1 orders.

for $1000 = 909.1 orders

at 910 orders the profit made will be $1001 (which > $1000)

therefore, our calculation of time will be base on 910 orders

18 orders in 4 minute

910 orders = 202.2 approximately 202min (which will be less than $1000)

therefore, we need to increase the order to the next minutes says 203 minutes.

913 orders = (913 * 4)/18 = 202.8mins = 3.38 hours = 3hours 23mins

in conclusion, the phone order will end at 4+ 3hours 23mins = 7:23 pm

5 0
3 years ago
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