Answer:
Yield to Maturity(YTM) = 3.47%
Explanation:
<em>The yield to maturity is the required rate of return (discount rate) that would equate the price of the bond and cash outflow expected from the bond. The yield on the bond can be determined as follows using the formula below: </em>
YTM = C + F-P/n) ÷ 1/2 (F+P)
YTM-Yield to maturity-
C- coupon
F- Face Value
P- Current Price
DATA
Coupon = coupon rate × Nominal value = 1,000 × 8%× 1/2=40(note we divide by 2 because interest is paid semi-annually)
n= 4×2 = 8 (note there 2 half months in a year)
Face Value = 1000
YM-?, C-40, Face Value - 1,000, P-103.75/100× 1000 = 1037.5
YM = (40 + (1000-1037)/8) ÷ ( 1/2× (1000 + 1037.5 ) ) =0.0347
YM = 0.0347
× 100 = 3.47%
Yield to Maturity = 3.47%
Answer:
D : Company 4
Explanation:
Since all the painting companies require 5 hours to paint the truck, and they all will use the same amount of materials, then you have to choose the company that charges the lowest rate per hour:
- Company 1 charges $57 per hour x 4 hours = $285 + $240 = $525
- Company 2 charges $52.50 per hour x 4 hours = $262.50 + $240 = $502.50
- Company 3 charges $48.95 per hour x 4 hours = $244.75 + $240 = $484.75
- Company 4 charges $46.20 per hour x 4 hours = $231 + $240 = $471 ⇒ lowest price
Answer: stable, heuristic, heterogeneity and volatility
Explanation:
In relatively stable markets, heuristic might be acceptable; however, with substantial heterogeneity and volatility, they often lead to poor trade-off decisions.
It should be noted that heuristics are simply mental shortcuts that help ease decision making and examples rule of thumb, using trial and error, an educated guess etc. This often leads to poor decisions in the end.
To solve for the price elasticity of demand, we utilize the formula below.
Price elasticity of demand = <span>% Change in Demand Quantity
</span> % Change in Price
where: % Change in Demand Quantity = (Qnew -Qold)/Qold
% Change in Price = (Pnew - Pold/)Pold
Using midpoint method, the formula changes to:
% Change in Demand Quantity = (Qnew -Qold)/Qave = (200000-100000)/150000 = 67%
% Change in Price = (Pnew - Pold/)Pave = (1-1.5)/1.25 = -40%
Price elasticity of demand = 67%/-40% = -1.675%
<em>ANSWER: -1.675%</em>