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3 years ago

Why is a high-quality bond typically considered a lower risk investment than a stock?

1 answer:

5 0

A high-quality bond is typically considered a lower-risk investment than a stock because a bond typically pays a fixed, predictable amount of interest each year.

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Big Canyon Enterprises has bonds on the market making annual payments, with 18 years to maturity, a par value of $1,000, and a p

AnnyKZ [126]

Answer:

The correct answer is 8.679%.

Explanation:

According to the scenario, the given data are as follows:

Face value (F) = $1,000

Bond value (B)= $955

Time (t) = 18 years

Yield (r) = 9.2%

First we calculate the coupon payment:

Let coupon payment = C

then,

B = C × $\frac{1 - \frac{1}{(1+r)^{t} } }{r} + \frac{F}{(1+r)^{t} }$

By putting the value, we get

$955 = C× $\frac{1 - \frac{1}{(1+0.092)^{18} } }{0.092} + \frac{1000}{(1+0.092)^{18} }$

$955 = C × 8.64 + 205.11

C = 86.79

So, Coupon Rate = Coupon Payment ÷ Face value

= 86.79 ÷ 1000

= 0.08679

= 8.679%

8 0

3 years ago

You need a 30-year, fixed-rate mortgage to buy a new home for $280,000. Your mortgage bank will lend you the money at an APR of

SashulF [63]

Answer: $‭415,688‬

Explanation:

First find the future value of paying $1,200 every month for 360 months.

This is the future value of an annuity:

= Payment * ([1 + interest) ^ no. of periods - 1) / interest

Use periodic interest = 5.75%/ 12

30 years * 12 = 360

= 1,200 * ( ( 1 + 5.75%/12)³⁶⁰ - 1) / 5.75% / 12

= $1,149,357.14

Future value of the loan amount is:

= 280,000 * (1 + 5.75% / 12) ³⁶⁰

= $1,565,045.14

Ballon Payment = 1,565,045.14 - 1,149,357.14

= $‭415,688‬

7 0

3 years ago

When the Fed adjusts its interest rate, it directly influenced consumer?

ozzi

It directly affects consumers because you end up paying higher cost for everything. It also affects employment rates, and many other things and creates a waterfall of issues that have to be adjusted to stop inflation.

4 0

3 years ago

Read 2 more answers

Using the aging method of accounts receivable method, $5,000 of the company's Accounts Receivable are estimated to be uncollecti

romanna [79]

Answer:

The answer is A.

Explanation:

Closing/Ending balance in Allowance for Doubtful Accounts = Unadjusted credit (debit) balance in Allowance for Doubtful Accounts + Bad Debt Expense

To get Bad Debt Expense, we re-write the formula:.

Closing/Ending balance in Allowance for Doubtful Accounts − Unadjusted ending credit (debit) balance in Allowance for Doubtful Accounts

Ending/Closing method balance in allowance for doubtful debt= $5,000

Unadjusted ending credit (debit) balance in Allowance for Doubtful Accounts =$500

So we have:

= $5,000 − $500

= $4,500

6 0

3 years ago

Read 2 more answers

For 2021, Sherri has a short-term loss of $2,500 and a long-term loss of $4,750. a. How much loss can Sherri deduct in 2021?

lakkis [162]

Based on the information given the amount of loss that Sherri deduct in 2021 is $3,000.

<h3>Short-term loss and long-term loss</h3>

Since he had both short-term loss and long-term loss the amount of loss that is deductible is $3,000 of capital loss. ($1,500 each for married filing separately).

Both the short-term loss and the long-term loss are combined up to the limit of the amount of $3,000 and the capital loss in excess of the amount of $3,000 are carried forward to following year.

Inconclusion the amount of loss that Sherri deduct in 2021 is $3,000.

Learn more about short-term loss and long-term loss here:brainly.com/question/25117603

7 0

2 years ago