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3 years ago

Which of the following statements is TRUE? (economics)

Business

1 answer:

Angelina_Jolie [31]3 years ago

6 0

Answer:

Explanation:

Banks are other lending entity's has access to a customer borrowing history. Through credit rating agencies, a bank can know whether a customer has a bad history in making loan repayments.

When a customer takes up a loan, banks share that information with a credit rating agency. The agency updated its records with the customer's national identity, such as the social security number. The banks keep on updating agencies on how each customer is meeting their obligation. Credit card payments are considered as loans.

Credit agencies rates each customer creditworthiness by assessing how they been repaying their debts. A higher credit score means the customer repays his loans promptly without missing installments. The information of each customer is available to all banks and lenders upon request.

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Miller Corporation has a premium bond making semiannual payments. The bond has a coupon rate of 10 percent, a YTM of 8 percent,

Alex17521 [72]

Answer:

a. What is the price of each bond today?

Miller Corporation bond = $1,179.71

Modigliani Company bond = $835.42

b. Miller Modigliani Company

Corporation Bond Bond

1 year $1,170.26 $841.89

4 years $1,142.86 $866.67

9 years $1,083.33 $920

13 years $1,019.23 $980.95

14 years $1,050 $1,040

Explanation:

YTM formula:

Miller Corporation

YTM = [coupon + (face value - market value)/n] / (face value + market value)/2

0.04 = [50 + (1,000 - x)/28] / (1,000 + x)/2

0.02(1,000 + x) = 85.71 - 0.0357x

20 + 0.02x = 85.71 - 0.0357x

0.0557x = 65.71

x = 65.71 / 0.0557 = $1,179.71

if we want to calculate the bond price in one year, we replace 28 by 26

0.04 = [50 + (1,000 - x)/26] / (1,000 + x)/2

0.02(1,000 + x) = 88.46 - 0.0385x

20 + 0.02x = 88.46 - 0.0385x

0.0585x = 68.46

x = 68.46 / 0.0585 = $1,170.26

if we want to calculate the bond price in 4 years, we replace 28 by 20

0.04 = [50 + (1,000 - x)/20] / (1,000 + x)/2

20 + 0.02x = 100 - 0.05x

0.07x = 80

x = 80 / 0.07 = $1,142.86

if we want to calculate the bond price in 9 years, we replace 28 by 10

0.04 = [50 + (1,000 - x)/10] / (1,000 + x)/2

20 + 0.02x = 150 - 0.1x

0.12x = 130

x = 130 / 0.12 = $1,083.33

if we want to calculate the bond price in 13 years, we replace 28 by 2

0.04 = [50 + (1,000 - x)/2] / (1,000 + x)/2

20 + 0.02x = 550 - 0.5x

0.52x = 530

x = 530 / 0.52 = $1,019.23

Modigliani Company

YTM = [coupon + (face value - market value)/n] / (face value + market value)/2

0.05 = [40 + (1,000 - x)/28] / (1,000 + x)/2

0.025(1,000 + x) = 75.71 - 0.0357x

25 + 0.025x = 75.71 - 0.0357x

0.0607x = 50.71

x = 50.71 / 0.0607 = $835.42

if we want to calculate the bond price in one year, we replace 28 by 26

0.05 = [40 + (1,000 - x)/26] / (1,000 + x)/2

0.025(1,000 + x) = 78.46 - 0.0385x

25 + 0.025x = 78.46 - 0.0385x

0.0635x = 53.46

x = 53.46 / 0.0635 = $841.89

if we want to calculate the bond price in 4 years, we replace 28 by 20

0.05 = [40 + (1,000 - x)/20] / (1,000 + x)/2

25 + 0.025x = 90 - 0.05x

0.075x = 65

x = 65 / 0.075 = $866.67

if we want to calculate the bond price in 9 years, we replace 28 by 10

0.05 = [40 + (1,000 - x)/10] / (1,000 + x)/2

25 + 0.025x = 140 - 0.1x

0.125x = 115

x = 115 / 0.125 = $920

if we want to calculate the bond price in 13 years, we replace 28 by 2

0.05 = [40 + (1,000 - x)/2] / (1,000 + x)/2

25 + 0.025x = 540 - 0.5x

0.525x = 515

x = 515 / 0.525 = $980.95

4 0

3 years ago

At a Hallmark store you can find several different product lines of greeting cards, likely including Fresh Ink, Nature's Sketchb

otez555 [7]

Answer:

It is an example of demographic segmentation.

Explanation:

To start with, demographics is the study of a population (especially a human population) on the basis of factors that include race, age, gender, households, families, ethnicity,education, income e.t.c.

Thus, demographic segmentation is a market segmentation based on factors that include race, age, gender, households, families, ethnicity, education, income e.t.c.

This kind of segmentation helps an organization or business like Hallmark store (from the question) to accurately target its customers and effectively satisfy their needs.

3 0

4 years ago

On a job search, strong writing skills are important when preparing a

agasfer [191]

Answer:

c. résumé

Explanation:

A resume is a document prepared by job seekers and presented to hiring managers or recruitment agencies. A resume is a formal document. It highlights the job seeker's educational background, skills, and work experience. Job seekers use the resume to showcase their achievements in previous positions.

Recruiters use the resume to identify applicants with the skills required to perform various roles.

8 0

3 years ago

Read 2 more answers

Recording transactions and events is known as

Vaselesa [24]

Answer:

recordkeeping or bookkeeping

Explanation:

3 0

3 years ago

Activity A1 takes 5 weeks, A2 takes 7 weeks, and A3 takes 4 weeks with a 50% probability and 10 weeks with a 50% probability. Wh

meriva

Answer:

Explanation:

The computation of the project completion time under the best-case scenario is shown below;

= Activity A1 weeks taken + activity A2 weeks taken

= 5 weeks + 7 weeks

= 12

We simply added the time taken by activity 1 and activity 2 so that the project completion time could come

5 0

3 years ago