1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
aleksley [76]
3 years ago
6

McCurdy Co.'s Class Q bonds have a 12-year maturity, $1,000 par value, and a 5.75% coupon paid semiannually (2.875% each 6 month

s), and those bonds sell at their par value. McCurdy's Class P bonds have the same risk, maturity, and par value, but the P bonds pay a 5.75% annual coupon. Neither bond is callable. At what price should the annual payment bond sell
Business
1 answer:
dem82 [27]3 years ago
6 0

Answer:

$993.08

Explanation:

the market interest is 2.875% semiannual, that is why Q bonds are sold at par. To determine the value of P bonds we must add the present value of the face value and the coupon payments:

the effective interest rate = (1 + 5.75%/2)² - 1 = 5.83%

PV of face value = $1,000 / (1 + 5.83%)¹² = $1,000 / 1.974405523 = $506.48

PV of coupon payments = $57.50 x 8.46254 (PV annuity factor, 5.83%, 112 periods) = $486.60

market price = $993.08

You might be interested in
With no inflation, a bank would be willing to lend a business firm $5 million at an annual interest rate of 6%. But if the rate
MAXImum [283]

Answer:

The nominal interest rate which the bank will offer is of 10.24%

Explanation:

according to Irwin formula the bank will charge a nominal rate that ensures a real rate of 6% thus:

\frac{1+r_n}{1+ \theta} -1 =r_e

(1+r_e)(1+ \theta) -1 = r_n

1.06*1.04-1 = 0.1024 = 10.24%

8 0
3 years ago
How do seat belts and air bags save lives?
evablogger [386]
They are a safety requirement in which if a person gets into a incident for example, in a car crash the person will be safer than just being without protection in the vehicle they are being transported or driving in
4 0
3 years ago
Which plan offers a tax-free education?
harkovskaia [24]

The 529 plan is the plan that offers a tax-free education

8 0
3 years ago
_____ refers to the idea that all organizational members are capable of leading themselves at least to some extent. ​ a. Leaders
scoray [572]

Answer:

Option d (Self-leadership) seems to be the appropriate response.

Explanation:

  • Self-leadership seems to be a process through recognizing whoever you are, defining certain ideal perceptions, as well as consciously leading yourself towards yourself.
  • It, therefore, tells people who you are, but whether you're a certain kind of individual individuals would like to emulate.

Other possibilities aren't connected to the circumstance in question. So that is indeed the right choice.

6 0
3 years ago
Sue purchased a 3.5 percent, $100,000 U. S. Treasury bond 6 months ago when the bid quote was 124.1850 and the asked quote was 1
Katena32 [7]

Answer:

The total dollar return on this investment is $1765

Explanation:

The total dollar return on the investment by Sue is a sum of the interest earned by Sue during this period and the profit due to the increase in bid/ask price of the bond.

Interest earned = [(0.035/2) x $100,000] = $1750;  

The selling price by Sue today will be the bid quote today and for the purchase price on which Sue bought the bond we will take the asked quote on purchase.

bid quote today = 124.2175

asked quote on purchase = 124.2025

Profit earned on selling = (Bid quote today - Asked quote on purchase) * $100,000

= [(124.2175 - 124.2025) x $100,000] = $15

Total return = $1750 + $15 = $1765

8 0
3 years ago
Read 2 more answers
Other questions:
  • Suppose the herfindahl indexes for industries a, b, and c are 7,200, 5,000, and 1,500, respectively. these data imply multiple c
    15·1 answer
  • If a partner in a limited partnership dies, the partnership ceases to exist. true
    10·1 answer
  • What is a credit union?
    8·2 answers
  • Which of these fees is paid at the closing when a home purchase is finalized?
    13·1 answer
  • Determine the following:_______
    9·1 answer
  • How do you get brainlist
    10·1 answer
  • The innovation paradox implies that consistency in products and services provokes a tension with the need for new products. This
    14·1 answer
  • On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four useful
    9·1 answer
  • Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
    12·1 answer
  • The following data were reported by a corporation: 20,000 15,000 3,000the number of outstanding shares is:
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!