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OlgaM077 [116]
3 years ago
7

Vulcan, Inc., has 8.7 percent coupon bonds on the market that have 10 years left to maturity. The bonds make annual payments and

have a par value of $1,000. If the YTM on these bonds is 10.7 percent, what is the current bond price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Lana71 [14]3 years ago
6 0

Answer:

$880.72

Explanation:

Bond price will be calculated by following formula

Bond Price = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F x ( 1 + r )^-n ]

Bond Price = $87 x [ ( 1 - ( 1 + 0.107 )^-10 ) / 0.107 ] + [ $1,000 x ( 1 + 0.107 )^-10 ]

Bond Price = $87 x [ ( 1 - ( 1.107 )^-10 ) / 0.107 ] + [ $1,000 x ( 1.107 )^-10 ]

Bond Price = $87 x [ ( 1 - ( 1.107 )^-10 ) / 0.107 ] + [ $1,000 x ( 1.107 )^-10 ]

Bond Price = $518.87 + $361.85

Bond Price = $880.72

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Answer: ELYSE. TSA. AFP. <—- the one that has that in the first Column

Explanation:

TSA is very similar to AFP

4 0
3 years ago
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Identify which of the factors below are better short-range predictors and which are better long-range predictors of movements in
alina1380 [7]

Answer:

Short range predictors:

c. Nominal interest rate differential

d. Psychological effects

e. Investor expectations

f. Bandwagon effect

Long range predictors:

a. Relative monetary growth

b. Relative inflation rates

Explanation:

Nominal rate, the real rate, and inflation. long term predictors of an economic theory in which a relationship between inflation, nominal interest rate and real interest rate is identified. It defines that real interest rate is equal to inflation minus nominal interest rate.

Bandwagon effect is a short range predictor because it is effect of uptake when people follow others. They take decisions what other do and its their belief that other people have taken the right decision so we too. This is just a short term hop based on beliefs regardless of any underlying evidence.

8 0
3 years ago
As you get older, a Target Date Fund will adjust
sweet [91]

The target Date fund will adjust by holding your stocks the same and slightly increasing your bonds. Therefore the correct option is (D).

<h3>What is Target-date funds ?</h3>

Target-date funds are the funds which increases the assets for the specific time period. It is also known as exchange traded funds. Thus it is an life cycle fund wherein the allocation of the portfolio gradually becomes more cautious.

The Target Date fund will adjust by holding your stocks the same and slightly increasing your bonds. Therefore the correct option is (D).

Learn more about  target Date fund  here:

brainly.com/question/14389226

#SPJ1

6 0
2 years ago
The narrowest definition of the money supply (M1) includes:
fenix001 [56]

Answer:

c. cash, checking account balances, and travelers' checks.

Explanation:

Money Supply is the concept that means the amount of the liquid financial products and total currency in the market or economy. It is regulated the macro-economically by the monetary policy. So, there are types of measures of money supply or stock:

-M0: narrowly, it means the hard currency in circulation

-MB: it equals M0+ the hard currency which are not technically in circulation and in bank reserves.

-M1: it is the most common one and equals M0 plus checking accounts plus travelers’ checks and other checkable deposits.

-M2: covers M1 and saving accounts and CDs.

-M3: it surrounds the larger deposits.

-MZM: finally, this indicates the money market deposits.

That’s why we could notice that M1 narrowly means the cash, checking account and travelers’ checks.

5 0
3 years ago
Tatsuo has just been awarded a four-year scholarship to attend the university of his choice. The scholarship will pay $9,000 eac
a_sh-v [17]

Answer:

Value of scholarship today = $30,484.90

Explanation:

The value of the Scholarship is the present value of the annual payment of $9,000 discounted as the annual interest rate of 7% per annum.

This can be computed using the formula below

Present Value = Annual cash flow ×  (1- (1+r)^(-n)/r)

n -number of years, r-interest rate

rate r- 7%, n=4, Annual  cash flow = 9,000

Present Value = 9,000× (1-1.07^-4)/0.07

                      = 9,000× 3.3872

                      = $30,484.90

Value of scholarship today = $30,484.90

4 0
3 years ago
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