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jasenka [17]
3 years ago
11

"How much would an investor expect to pay for a $1,000 par value bond with a 9% annual coupon that matures in 5 years if the int

erest rate is 5%
Business
1 answer:
SVEN [57.7K]3 years ago
5 0

Answer:

The answer is $1,173.18

Explanation:

N(Number of periods) = 5 years

I/Y(Yield to maturity) = 5percent

PV(present value or market price) = ?

PMT( coupon payment) = $90 ( 9percent x $1,000)

FV( Future value or par value) = $1,000.

We are using a Financial calculator for this.

N= 5; I/Y = 5; PMT = 90; FV= $1,000; CPT PV= -1,173.18

Therefore, the market price of the bond is $1,173.18

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You recently purchased a stock that is expected to earn 12% in a booming economy, 8% in a normal economy and lose 5% in a recess
Papessa [141]

Answer:

The expected return on this stock is 7.3%

Explanation:

Using the expectations model, we can calculate the expected return on the stock based on the return on stock in different scenarios/states and the probability of those states.

The expected return on the stock is,

Expected r = rA * pA  +  rB * pB  + rC * pC

Where,

  • r represents the returns in each state
  • p represents the probability of each state

Expected r = 0.12  * 0.15  +  0.08 * 0.75  +  (-0.05 * 0.1)

Expected r = 0.073 or 7.3%

3 0
3 years ago
A flexible-budget variance is $800 favorable for unit-related costs. This indicates that costs were: _____________
Galina-37 [17]

Answer: $800 less than standard for the achieved level of activity

Explanation:

A flexible budget variance refers to the difference that occurs between the results that are gotten by a flexible budget model and the actual results gotten.

Since the flexible-budget variance is $800 favorable for unit-related costs, this indicates that costs were $800 less than standard for the achieved level of activity.

Therefore, the correct option is D.

6 0
3 years ago
If the auditor believes that the financial statements are not fairly stated or is unable to reach a conclusion because of insuff
emmainna [20.7K]

Answer:

C. has the responsibility of notifying financial statement users through the​ auditor's report.

Explanation:

Auditor responsibility: The responsibility of the auditor is to give the true and fair opinion on the company's financial statements. The checking of an error or any fraud done by the company is checked by the auditor and the same is communicated to the users of the financial statement.  

If all the things are fine than the auditor gives the unqualified opinion else it gives the qualified opinion.

Thus, all other statements are incorrect because it is against the rules and regulations, so if the statement is not fairly stated or the evidence is insufficient to reach any conclusion, the auditor has to notify the users of the financial statement through the​ auditor's report.

6 0
3 years ago
Even in a monopoly consumers can find substitute goods or services. True or false?
saveliy_v [14]

Answer:

True

Explanation:

Even in a monopoly consumers can find substitute goods or services.

Consumers are able to choose what they want to purchase.

3 0
3 years ago
Read 2 more answers
A proxy is: Multiple Choice A document that delegates a stockholder's voting rights to an agent. A contractual commitment by an
serg [7]

Answer:

Option (A) is correct.

Explanation:

A proxy refers to a document which represents the authority to take some decision or do some activity on behalf of other person. For example, in case of voting, proxy could be used for voting here to represent some other person. A proxy is also referred as the authority or power given to a person to act for another person.

8 0
3 years ago
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