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3 years ago

The current yield curve for default-free zero-coupon bonds is as follows:

Business

1 answer:

Vesna [10]3 years ago

3 0

Answer:

A) the implied 1 year forward rates respectively 9,8 , 11,81 and 13,83 according to the formular

Explanation:

b) pure expactations true then

1.108²/1.098 - 1 =11.81% for a two year bond

1.118²/1.108 - 1 = 12.81% for a three year bond

The answere: The will be a shift upwards in next years curve.

c) Assume a par of 1000

in the next year a two year zero coupon bond will be a year zero and sell at 1000/1.1181 = 894.37 to get the return we take divide selling prices at year zero the trading price according to ytm is 1000/1.108² =814.55

therefore expected return 894.37/814.55= 9.79%

c2 the zero coupon bond at three year zero is trading at 1000/1.1282 = 886.446 and according to the ytm the coupon is trading at 1000/13.83^3= 715.607

therefore the expected return is

785.711/715.607=9.79%

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Home Security Systems is analyzing the purchase of manufacturing equipment that will cost $95,000. The annual cash inflows for t

Citrus2011 [14]

Answer:

internal rate of return is 20.463%

Explanation:

given data

Year Cash Flow

1 $48,000

2 $46,000

3 $41,000

equipment cost = $95,000

to find out

Determine the internal rate of return

solution

we consider here internal rate of return is x

so we can say present value of inflows = present value of outflows

equate here

$95000 = $\frac{48000}{(x)} +\frac{46000}{(x)^2} +\frac{41000}{(x)^3}$

solve it we get

x = 20.463 %

so internal rate of return is 20.463%

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4 years ago

2. At a consumer optimum, for all goods purchased, marginal utility per dollar spent is equalized. A high school student is deci

Greeley [361]

Answer:

The high school student should analyze the point at which the marginal cost equals the marginal benefit.

In other words, he or she should see if the increased costs of attending Petesburg University are more or less equal to the increased benefit that is gained from graduating from a more prestigious university.

The student should also analyze the possible opportunity cost in the future. Attending amore renowned college can result in better job prospects than doing otherwise. Higher salaries in the future could be given up if he or she chooses the cheaper option.

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3 years ago

You own a portfolio that is 34 percent invested in Stock X, 22 percent invested in Stock Y, and 44 percent invested in Stock Z.

Sonja [21]

Answer:

13.86%

Explanation:

34% was invested into stock X with an expected return of 11%

22% was invested into stock Y with an expected return of 18%

44% was invested into stock Z with an expected return of 14%

The expected return on the portfolio can be calculated using the formula below

Expected return= Sum of ( weight of stock×return of stock)

= (0.34×11%)+(0.22×18%)+(0.44×14%)

= 3.74+3.96+6.16

= 13.86%

Hence the expected return on the portfolio is 13.86%

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3 years ago

Tri Fecta, a partnership, had revenues of $367,000 in its first year of operations. The partnership has not collected on $45,800

inessss [21]

Answer:<em> </em><em>$ 155,440</em>

Explanation:

Receipt:

Cash received from customer(367,000 - 45,800) 321,200

Investment 47,000

Borrowed money 26,000

Total Receipts 394,200

Disbursement:

Payment to vendor(240,000 - 39,600) 200,400

Salary 26,200

Interest 2,860

Insurance policy 9,300

Total Disbursement (B) 238,760

Cash balance (A - B) 155,440

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3 years ago

By state law, the local sales tax is fixed at no more than ______ percent of the value of the sale. Multiple choice question.

Anna007 [38]

State law in Texas posits that local sales tax cannot be more than<u> 2%</u> of the value of sale.

<h3>What does Texas state law say?</h3>

Texas state law allows for counties to charge sales taxes on goods and services sold in those areas.

They however limit the amount of taxes that can be paid to 2% so as not to overburden consumers who will have to bear the tax burden.

In conclusion, this is 2%.

Find out more on local sales taxes at brainly.com/question/802898.

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2 years ago