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2 years ago

Floating-rate bonds have a __________ that is adjusted with current market interest rates

Business

1 answer:

Andrej [43]2 years ago

5 0

Floating-rate bonds have a coupon rate that is adjusted with current market interest rates

<h3>What is coupon rate?</h3>

A coupon is the interest payment received by a bondholder from the date of issuance until the maturity date of the bond. Coupons are typically defined in terms of the "coupon rate," which is derived by adding the total amount of coupons paid per year and dividing it by the face value of the bond.

The coupon rate of a bond in relation to market interest rates has a significant impact on how bonds are priced. When a coupon is greater than the current interest rate, the bond's price rises; when the coupon is less, the bond's price falls.

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Which of the following can be done by salespeople to send strong signals of interest and understanding to potential buyers? Gro

Molodets [167]

Answer:

The correct answer is letter "B": Restating and paraphrasing the sender's message.

Explanation:

Salespeople should <em>paraphrase potential customers' segments</em> to make sure they understood what they said and to show they are paying attention to them. By doing so, consumers will feel like the salespeople understand their demands and that they care for the consumers' satisfaction while making the purchase.

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3 years ago

uppose the current term structure of interest rates, assuming annual compounding, is as follows: s_1s 1 s_2s 2 s_3s 3 s_4s

Ahat [919]

Answer:

7.53%

Explanation:

Calculation for the discount rate of d(0,4)d(0,4)

The discount factor is : d=1/1+i

And given that the interest rates are compounded annually the discount factor will gives the present value of the bond when provided with the interest rate and maturity value.

Therefore the present value of a bond with a maturity value of 1 will be;

Present value=1 /(1+i1) (1+i) (1+i3) (1+i4)

Present value=1 / (1.07) (1.073) (1.077) (1.081)

Present value=0.748

The present value of a bond with a maturity value of 1 will therefore be 0.748.

Now, let calculate the discounting factor for the whole 4 years:

1 (1+d (0,4))‐⁴ =0.748

(1+d(0,4))=0.748‐¹/⁴

1+d (0,4) =1.0753

d (0,4)=0.0753

Therefore the discount rate will be 7.53%

5 0

3 years ago

Identify which characteristic describes common stock (CS) or preferred stock (PS) financing. May have cumulative and participati

shepuryov [24]

Answer:

Common Stock (CS)

Places minimum operating constraints on the firm. - Common stock does not have to be paid dividends so place no obligations on the firm.
Last to receive distribution of assets in the event of bankruptcy and liquidation. - CS is paid last when assets are liquidated as debt and preferred stockholders are paid off first.

Preferred Stock (PS)

May have cumulative and participating features. - Can be cumulative which means that if dividends are not paid in one year, the dividend will be accrued and eventually paid or they can be Participating which means that they can receive more dividends than they are entitled to.
May be convertible into another type of security. - Preference shares can be converted into other securities such as Common stock.

7 0

4 years ago

Builders Inc., Real Estate Broker, Inc., and Developers, Inc. form a business to purchase, develop, and build a shopping mall in

Nina [5.8K]

Answer:

Joint Venture

Explanation:

The reason is that in a joint venture, two or more than two companies form a partnership aggrement to achieve the combined objectives in a limited time constraint. The companies gain synergy in achieving that combined objective which is all because of the pooling of resources of the venturing organization. Here is the similar case. Three organization here had formed a contract and agreed to pool their resources to achieve a combined objective. Once this objective is achieved the partnership (Joint Venture) will be dissolved.

6 0

3 years ago

A bond has a par value of $1,000, a current yield of 7.25 percent, and semiannual coupon payments. The bond is quoted at 97.66.

zubka84 [21]

Answer:

7.08%

Explanation:

Face Value = $1,000

Current Price = 1000 x 97.66% = 976.6

Current yield = 7.25%

We can find the coupon rate by a simple formula

Coupon Rate = (Interest / Face value) x 100

We need to find interest first in order to find coupon rate

YTM = Interest / Current price

7.25% x 976.6 = Interest

70.7035 = Interest

Coupon Rate = (70.8035 / 1000) x 100

Coupon Rate = 7.08%

8 0

3 years ago