Answer: 0.05628 = 5.628%
The minimum yield that Mary could receive is 5.628%
Explanation:
Using the YTM (yield to maturity) formula
YTM = C + (f - p) /n ÷ (f+p) /2
C = coupon rate ; 4% of 1,100(par value) = 4/100 × 1,100 = 44
f = face value ( par value) = 1,100
P = market price = 1021.50
n = number of years = (10 - 5)= 5years : since the bond could be called at the end of 5 years.
YTM = 44 + (1,100 - 1,021.50)/5 ÷ (1,100+1,021.50)/2
YTM = 44 + ( 78.5)/5 ÷ 2121.5/2
YTM = 59.7/1,060.75
YTM = 0.05628
= 5.628% as the minimum yield Mary could receive.
Answer:
0.43
Explanation:
The computation of the weight of Security A for the minimum variance portfolio is shown below:
Weight of security A is
= (Standard deviation of Security B) ÷ (Sum of the standard deviation of securities)
= (12%) ÷ (16% + 12%)
= (12%) ÷ (28%)
= 0.43
We simply applied the above formula so that the weight of Security A
Answer:
Effective interest recognized on June 30, 20X1, will be equal to $3,354
Explanation:
Data provided from the question,
Amount of bond issued on January 2, 20X1 = $100,000 of 6% bonds
Interest = $3000
Payable semi-annually on June 30 and December 31
Number of years to mature = 5 years
The bond issued for $95,842 with an effective interest rate of 7%
Therefore, the Effective interest recognized on June 30, 20X1 =
bond issued × effective interest rate × semiannually(1/2)
= $95,842 x 0.07 x 0.5
= $3,354
Service cost
Answer: Option A.
<u>Explanation:</u>
The net pension liability is the amount by which the liability of the pension increases the total pension assets. This increases the troubles of the people who are leading a retired life. The lower the rate of interest, more are the liabilities on the retired person's life.
On the other hand when the total pension assets are more than the total pension liabilities, then it i known as the net pension assets.
Answer: three times as large
Explanation:
Economic order quantity will be calculated as follows:
EOQ = ✓(2DS/H)
D = Demand in units
Here S = Ordering cost = $10
H = Holding cost
Since S = $10
Therefore, EOQ will be:
= ✓(2DS/H)
= ✓(2 × 10 × D/ H)
= ✓(20D/H)
Since we're to increase the order cost from $10 per order to $90 per order, then EOQ will be:
Since S = $90
Therefore, EOQ will be:
= ✓(2DS/H)
= ✓(2 × 90 × D/ H)
= ✓(180D/H)
3✓20DH
The revised EOQ will then be 3 times as large.
