Answer:
The cuopon rate is 8%
Explanation:
We are given with the data and need to solve for the rate of the cuopon:
Market value: 1,006.27
Market value = cuopon payment + maturity
Maturity 1,000
time 9
rate 0.079
PV 504.4371 = Maturity value
Market value = cuopon payment + maturity
1,006.27 = cuopon payment + 504.44
1,006.27 - 504.44 = 501.83
The present value of the cuopon payment Using the annuity formula we solve for cuota:
then:
PV $501.83
time 9
rate 0.079
C -$ 80.00
We know that Cuopon payment is equal to:
Face value x bonds interest = C
1,000 x r = 80
r = 80/1,000 = 0.08 = 8%
Answer:
$42.51
Explanation:
The daily balance during April 1st to April 14th was $50.51, then from April 15th to April 30th is was 35.51.
average daily balance = [($50.51 x 14 days) + ($35.51 x 16 days)] / 30 days = ($707.14 + $568.16) / 30 days = $42.51
The average daily balance is used to calculate interest charges by adding the debt balance at the end of every day, and then dividing it by the number of days in the month. This method is commonly used by banks that issue credit cards.
Answer:
It is True that Bertrand and Mullainathan create fictitious housing applications in the article.
<u>Explanation:</u>
Yes, fictitious housing applications were created by Bertrand and Mullainathan. They were NBER Faculty research fellows. They experimented and send resumes with fictitious housing.
Bertrand and Mullainathan wanted to find discrimination against African-Americans. So they mention in their resumes fictitious details regarding housing like a wealthier neighborhood with the more white population. Such resumes received more calls as compared to resumes where the housing of African-Americans was not wealthier.
A bond with default risk will always have a positive risk premium and an increase in its default risk will raise the risk premium.
<h3>What is a Default Risk Premium?</h3>
The difference between the interest rate on a debt instrument and the risk-free rate is basically the default risk premium. Investors are given a discount for the possibility of a default by a company through the default risk premium.
<h3>What is Risk premium formula?</h3>
The return on risk-free investment is subtracted from the return on investment to determine the risk premium. A rough estimate of the expected returns on a moderately hazardous investment in comparison to those gained on a risk-free investment can be obtained using the Risk Premium formula.
Formula for Risk Premium: Ra - Rf
<h3>
How a Risk Premium Works?</h3>
Consider risk premium as a type of investment insurance. A worker assigned to risky labor anticipates receiving hazard pay as payment for the risks they assume. It's comparable to making risky investments. For an investor to be willing to take on the risk of losing some or all of their cash, a risky investment must have the potential for higher returns.
Learn more about Default Risk Premium:
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Answer:
The correct option is: (A) generates positive cash flows over and above its internal requirements, thus providing a corporate parent with cash flows that can be used for financing new acquisitions, investing in cash hog businesses, and/or paying dividends.
Explanation:
A cash cow type of business is the business that produces a steady return of profits, once established and requires little to no maintenance.
It refers to the business that generates positive cash flows which can be used for buying back shares on the market or investing in cash hog businesses or increasing dividends paid to the shareholders.