The fundamental limitation of a matrix structure is that it _______

Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 7.5 percent, a YTM of 6 percent, and 13 years

bija089 [108]

Answer:

a. What are the prices of these bonds today?

price of bond X:

0.03 = {37.5 + [(1,000 - MV)/26]} / [(1,000 + MV)/2]

0.03 x [(1,000 + MV)/2] = 37.5 + [(1,000 - MV)/26]

0.03 x (500 + 0.5MV) = 37.5 + 38.46 - 0.03846MV

15 + 0.015MV = 75.96 - 0.03846MV

0.05346MV = 60.96

MV = 60.96 / 0.05346 = $1,140.29

price of bond Y:

0.0375 = {30 + [(1,000 - MV)/26]} / [(1,000 + MV)/2]

0.0375 x [(1,000 + MV)/2] = 30 + [(1,000 - MV)/26]

0.0375 x (500 + 0.5MV) = 30 + 38.46 - 0.03846MV

18.75 + 0.01875MV = 68.46 - 0.03846MV

0.05721MV = 49.71

MV = 49.71 / 0.05721 = $868.90

b. What do you expect the prices of these bonds to be in one year?

price of bond X:

0.03 = {37.5 + [(1,000 - MV)/24]} / [(1,000 + MV)/2]

0.03 x [(1,000 + MV)/2] = 37.5 + [(1,000 - MV)/24]

0.03 x (500 + 0.5MV) = 37.5 + 41.67 - 0.04167MV

15 + 0.015MV = 79.17 - 0.04167MV

0.05667MV = 64.17/0.05667 = $1,132.29

price of bond Y:

0.0375 = {30 + [(1,000 - MV)/24]} / [(1,000 + MV)/2]

0.0375 x [(1,000 + MV)/2] = 30 + [(1,000 - MV)/24]

0.0375 x (500 + 0.5MV) = 30 + 41.67 - 0.04167MV

18.75 + 0.01875MV = 71.67 - 0.04167MV

0.06042MV = 52.92

MV = 52.92 / 0.06042 = $875.87

c. What do you expect the prices of these bonds to be in three years?

price of bond X:

0.03 = {37.5 + [(1,000 - MV)/20]} / [(1,000 + MV)/2]

0.03 x [(1,000 + MV)/2] = 37.5 + [(1,000 - MV)/20]

0.03 x (500 + 0.5MV) = 37.5 + 50 - 0.05MV

15 + 0.015MV = 87.5 - 0.05MV

0.065MV = 72.5

MV = 72.5 / 0.065 = $1,115.38

price of bond Y:

0.0375 = {30 + [(1,000 - MV)/20]} / [(1,000 + MV)/2]

0.0375 x [(1,000 + MV)/2] = 30 + [(1,000 - MV)/20]

0.0375 x (500 + 0.5MV) = 30 + 50 - 0.05MV

18.75 + 0.01875MV = 80 - 0.05MV

0.06875MV = 61.25

MV = 61.251 / 0.06875 = $890.91

d. What do you expect the prices of these bonds to be in eight years?

price of bond X:

0.03 = {37.5 + [(1,000 - MV)/10]} / [(1,000 + MV)/2]

0.03 x [(1,000 + MV)/2] = 37.5 + [(1,000 - MV)/10]

0.03 x (500 + 0.5MV) = 37.5 + 100 - 0.1MV

15 + 0.015MV = 137.5 - 0.1MV

0.115MV = 122.5

MV = 122.5 / 0.115 = $1,065.22

price of bond Y:

0.0375 = {30 + [(1,000 - MV)/10]} / [(1,000 + MV)/2]

0.0375 x [(1,000 + MV)/2] = 30 + [(1,000 - MV)/10]

0.0375 x (500 + 0.5MV) = 30 + 100 - 0.1MV

18.75 + 0.01875MV = 130 - 0.1MV

0.11875V = 111.25

MV = 111.25 / 0.11875 = $936.84

7 0

3 years ago

How should a person cope with situational factor for which there are ethical confident skills?

ipn [44]

Self-confidence is considered one of the most influential motivators and regulators of behavior in people's everyday lives (Bandura, 1986). A growing body of evidence suggests that one's perception of ability or self-confidence is the central mediating construct of achievement strivings (e.g., Bandura, 1977; Ericsson et al., 1993; Harter, 1978; Kuhl, 1992; Nicholls, 1984). Ericsson and his colleagues have taken the position that the major influence in the acquisition of expert performance is the confidence and motivation to persist in deliberate practice for a minimum of 10 years.

Self-confidence is not a motivational perspective by itself. It is a judgment about capabilities for accomplishment of some goal, and, therefore, must be considered within a broader conceptualization of motivation that provides the goal context. Kanfer (1990a) provides an example of one cognitively based framework of motivation for such a discussion. She suggests that motivation is composed of two components: goal choice and self-regulation. Self-regulation, in turn, consists of three related sets of activities: self-monitoring, self-evaluation, and self-reactions. Self-monitoring provides information about current performance, which is then evaluated by comparing that performance with one's goal. The comparison between performance and goal results in two distinct types of self-reactions: self-satisfaction or -dissatisfaction and self-confidence expectations. Satisfaction or dissatisfaction is an affective response to past actions; self-confidence expectations are judgments about one's future capabilities to attain one's goal. This framework allows a discussion of self-confidence as it relates to a number of motivational processes, including setting goals and causal attributions.

7 0

3 years ago

Thornton Industries began construction of a warehouse on July 1, 2016. The project was completed on March 31, 2017. No new loans

igomit [66]

Answer:

THORNTON INDUSTRIES

AMOUNT OF INTEREST TO BE CAPITALIZED FOR THE YEAR ENDED DECEMBER 31, 2016 AND 2017

2016

July 1 - Dec 31 $400,000 *4.8%*6/12 = $9,600

Sep 30 - Dec 31 $600,000*4.8%*3/12 = $7,200

Nov 30 - Dec 31 $600,000*4.8%*1/12 = $2,400

Total Interest for 2016  $19,200

2017

Jan 1 - Dec 31 $1,600,000*4.8% = $76,800

Jan 30 - Dec 31 $540,000*4.8%*11/12 = 23,760

Total interest for the year 2017 $100,560

weightred average cost of capital =

$2,000,000*8% + $8,000,000*4%

$2,000,000 + $8,000,000

= 160,000 + 320,000

10,000,0000

=$480,000 / 10,000,000 = 0.048 = 4.8%

Explanation:

Interest to be capitalized on construction expenditure will be interest on the amount borrowed to finance such construction. the interest will be from commencement of the construction to the cessation period

6 0

3 years ago

The term ____________________ refers to a market exchange that affects a third party who is outside or external to the exchange.

Flauer [41]

Answer: B. spillover

Explanation:

A Spillover is used to refer to the effects of an Externality which is what happens when a market exchange leads to effects on a third party that was not party to a transaction between the contracting parties.

The activities that result from the transaction spillover to the third party and can be either negative or positive. A negative spillover would be countries in Africa getting harsher global warming effects due to companies in china polluting the atmosphere.

5 0

3 years ago

Recommend ways to deal with the following personalities in the workplace"

Roman55 [17]

1) Know the complaint. Ask what they think is the best solution to resolve the problem. Weigh the pros and cons of their suggestions. If more pros than cons, implement their suggestions. If more cons than pros, ask them to suggest other ways of solving their complaints.
2) Narrow down the choices. Give them shorter time to think and hold them to their decision.
3) Let them share their expertise with others.
4) Let them share their ideas more. Let them be more involve in team activities so that they will feel that they belong.
5) Give them projects that they can kickstart. That way they will have a way to channel their aggressiveness. Let them be part of team building activities to help them adjust with other people's personalities.

5 0

3 years ago

The fundamental limitation of a matrix structure is that it ________.