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3 years ago

Both Bond Bill and Bond Ted have 5.8 percent coupons, make semiannual payments,

Business

1 answer:

viva [34]3 years ago

5 0

Answer:

Percentage change in Bill Price = (91.8486 - 100) / 100 = -0.0815 or -8.15%

Percentage change in Bill Price = (78.1448 - 100) / 100 = -0.2186 or -21.86%

Percentage change in Bill Price = (109.0298 - 100) / 100 = 0.0903 or 9.03%

Percentage change in Bill Price = (132.0946 - 100) / 100 = 0.3209 or 32.09%

Explanation:

To calculate the percentage change in the price of both the bonds, we assume that the par value of both the bonds is $100 each.

To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,

Coupon Payment (C) both Bill and Ted = 100 * 0.058 * 6/12 = $2.9

Total periods (n) - Bill= 5 * 2 = 10

Total periods (n) - Ted= 25 * 2 = 50

As the bonds were previously price at par, the YTM or market interest rate would have been same as the coupon rate. Thus, the old market interest rate was 5.8%. Now as the interest rates have risen by 2% new interest rate will be = 5.8 + 2 = 7.8%

New r or YTM - both Bill and Ted = 7.8% * 6/12 = 3.9% or 0.039

The formula to calculate the price of the bonds today is attached.

Bond Price - Bill = 2.9 * [( 1 - (1+0.039)^-10) / 0.039] + 100 / (1+0.039)^10

Bond Price - Bill = $91.8486

Percentage change in Bill Price = (91.8486 - 100) / 100 = -0.0815 or -8.15%

Bond Price - Ted = 2.9 * [( 1 - (1+0.039)^-50) / 0.039] + 100 / (1+0.039)^50

Bond Price - Ted = $78.1448

Percentage change in Bill Price = (78.1448 - 100) / 100 = -0.2186 or -21.86%

As the bonds were previously price at par, the YTM or market interest rate would have been same as the coupon rate. Thus, the old market interest rate was 5.8%. Now as the interest rates have fallen by 2% new interest rate will be = 5.8 - 2 = 3.8%

New r or YTM - both Bill and Ted = 3.8% * 6/12 = 1.9% or 0.019

The formula to calculate the price of the bonds today is attached.

Bond Price - Bill = 2.9 * [( 1 - (1+0.019)^-10) / 0.019] + 100 / (1+0.019)^10

Bond Price - Bill = $109.0298

Percentage change in Bill Price = (109.0298 - 100) / 100 = 0.0903 or 9.03%

Bond Price - Ted = 2.9 * [( 1 - (1+0.019)^-50) / 0.019] + 100 / (1+0.019)^50

Bond Price - Ted = $132.0946

Percentage change in Bill Price = (132.0946 - 100) / 100 = 0.3209 or 32.09%

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1 year ago

The purpose of a Chamber of Commerce is to foster a healthy business climate for all of the businesses in the community. Develop

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Answer:

Guidelines to consider include:

1. Planning

2. Deciding which social media platform is best for your business.

3. Knowing your audience

4. Expanding audience

5. Building relationships

6. Focusing on quality over quantity

7. Using the right tools

Explanation:

Social media is one of the ways to connect with a large number of individuals to boost business and sales.

Firstly, Planning is very vital in whatever we are doing. Without a plan, the organization has no clear goal of what they are trying to archive. The organisation should create a social media plan upfront.

Secondly, The local business should decide which social media platform is best for them.

Furthermore, the business should know and understand who their audience is by compiling data on current customers and social media analytics.

Afterwards, The organization should expand their audience since they have gotten a clear picture of who their audience is.

It is also very important for the business to focus on quality instead of quantity when creating content so as to offer value.

Finally, the organization should take advantage of tools to simplify work and boost productivity.

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3 years ago

The Playa Company has the following information in its records. Certain data have been intentionally omitted ($ in thousands). R

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Answer:

Particulars 2021 2022 2023

Beginning Inventory 277 253 235

Cost of Goods sold 633 623 586

Ending inventory 253 235 220

Cost of good available for sale 886 876 806

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Purchase discounts 20 17 26

Purchase returns 26 32 16

Freight-in 15 34 18

Explanation:

There are few missing values which are calculated using back solving technique. These values are bold and underlined. Playa Company has missing information for its three year accounts.

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3 years ago

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Answer:

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Explanation:

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For example, a public water supply company is an example of a monopoly because they serve as the only source of water provider to the general public in a society.

A natural monopoly exists when a single seller experiences lower average total costs than any potential competitor because of the very high start-up or initial cost and economy of scale.

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3 years ago

Which type of HR professional uses various methods, including contacts within the community and print and online media, to sea

Alexus [3.1K]

Answer:

Recruiter is the correct answer.

Explanation:

Recruiter's job is to works with managers to find the qualified candidates that fill the vacant post as per requirement.

Recruiter HR professional responsibilities are to use a different method that includes updatings the ads for jobs, selecting the required candidates, to conduct the background investigation to find for fitted job candidates.

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3 years ago