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galben [10]
4 years ago
12

Analysts estimate that a bond has a 40 percent probability of being priced at $950 and a 60 percent probability of being priced

at $1,050 one year from today. The bond is also callable at any time at $1,010. What is the expected value of this bond in one year?
Business
1 answer:
AnnZ [28]4 years ago
8 0

Answer:

Explanation:

40% probability that bond will be priced at $950

60% probability that bond will be priced at $1050

Expected value of the bond in one year:

(Probability*Price of bond) + (Probability * Callable price bond)= (0.4*$950)+(0.60*$1010)=$986

So, expected value is $986

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Determine the profit-maximizingLOADING... prices when a firm faces two markets where the inverse demand curves are Market​ A: p
Gala2k [10]

Answer:

Market A: P_{A} = 20.00

Market B: P_{B} = 20.00

Explanation:

Market A: P_{A} = 80 - 2Q_{A} ........................ (1)

Market B: P_{B} = 60 - 1Q_{B} ........................ (2)

MC = m = 20 ............................................... (3) for both markets

For Market A:

Profit maximizing price can be obtained when  P_{A} = m

Therefore, we have:

80 - 2Q_{A} = 20

80 - 20 = 2Q_{A}

60 = 2Q_{A}

Q_{A} = \frac{60}{2}

Q_{A} = 30

Substituting 50 for Q_{A} in equation (1), we have:

P_{A} = 80 - 2(30)

P_{A} = 80 - 60

P_{A} = 20.00

For Market B:

Profit maximizing price can be obtained when  P_{B} = m

Therefore, we have:

60 - 1Q_{B} = 20

60 - 20 = 1Q_{B}

40 = 1Q_{B}

Q_{B} = 40

Substituting 80 for Q_{B} in equation (2), we have:

P_{B} = 60 - 1(40)

P_{B} = 20.00

8 0
4 years ago
For an activity classified as a hobby, the expenses are categorized as follows:
wlad13 [49]

Answer:

Option C is correct.

The correct sequence is (2), (3), (1)

Explanation:

(2) Amounts deductible under other Code sections without regard to the nature of the activity, such as property taxes and home mortgage interest. should be deducted first

(3) Amounts deductible under other Code sections if the activity had been engaged in for profit, but only if those amounts do not affect adjusted basis (e.g., maintenance, utilities, and supplies). are deducted next

(1)Deductions affecting adjusted basis (e.g., depreciation) are taken next. At any point where the expenses exceed income,   the deduction is limited to the remaining income.

5 0
3 years ago
If you had $1100000000000 what would with it and why
Gennadij [26K]

Answer: buy my school than demolish it

Explanation:

8 0
3 years ago
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Myers Corporation has the following data related to direct materials costs for November: actual costs for 4,670 pounds of materi
lutik1710 [3]

Answer:

-4670 Favorable

Explanation:

actual- standard = variance

variance * actual lbs of material

5.2-6.2=-1*4670=-4670 Favorable

5 0
3 years ago
Tonya contributes $150,000 to Swan, Inc., for 80% of the stock. In addition, she loans Swan $600,000. The maturity date on the l
USPshnik [31]

Answer:

A. If the loan is not reclassified as equity, Swan can deduct interest expense annually of $18,000, and Tonya includes in gross income annually interest income of $18,000.

Explanation:

Loans received under $385 should not be reclassified as equity.

Interest expense is determined by multiplication of the money Tonya loans Swan multiplied by the interest rate.

Therefore,

Interest expenses = 600000 x 3%

                              = $18000

8 0
3 years ago
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