Answer:
Between 7.8 and 12 Years
Explanation:
The modified duration of a portfolio is defined as a weighted average in the modified duration of an individual bonds. Therefore it will lie between the extreme values of the modified duration of the bonds in portfolio so that the weights are all positive.
In the context, the modified duration lies between 7.8 years and 12 years as the modified duration would always lie between the lowest modified duration and the highest modified duration of any bonds in a portfolio. Therefore the weights are value that will lie between these two years.
Answer:
The current yield of the bond is 7.89%
Explanation:
The current yield is calculated by dividing the coupon payment by the price of the bond. To solve this question we first need to calculate the price of the bond. We will input the following in a financial calculator to find the price of the bond.
FV= 1,000
PMT= 0.082*1,000=82
N=11.5
I= 7.67
Compute PV=1,039
Now that we know the price we will divide the coupon payment which is 82 by the price which is 1,039.
82/1,039=0.0789=7.89%
Answer:
The answer is: $600
Explanation:
Ellison Inc.'s total sales for the year were $18,000. By the end of the year $12,000 had been paid in cash and $6,000 still remained as accounts receivable. Out of those $6,000, the credit manager estimates 10% will be be noncollectible, that amounts to $600 ($6,000 x 10%).
