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jeyben [28]
3 years ago
9

If there is a 5 year bond with 10% coupon rate, which was purchased at $980 and sold at $1020 by end of year 4, what is the inve

stor's yearly rate of return? How does it compare to coupon rate and YTM?
Business
1 answer:
Gennadij [26K]3 years ago
7 0

Answer:

14%

Explanation:

Rate of return = Coupon + (Selling price - face value) / face value

Rate of return  = $98 + ($1,020 - $980) / $ 980

                           = 0.14

                            = 14%

YTM = [C + (F - P) / n] ] / [(F + P) / 2 ]

Where:

  • C = Coupon
  • F = Face Value
  • P = Selling Price
  • n = Years to Maturity.

YTM = [$98 + ($980 - $1020) / 5] ] / [($980 + $1020) / 2 ]

       = 0.09

       = 9%

Thus, the yearly rate of return (14%) is higher than the coupon rate (10%), and the YTM (9%).

         

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Vika [28.1K]

Answer:

At will employment

Explanation:

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Through at-will employment, both the employee and the employer are able to terminate employment at any time. The employment can end at the discretion of either party at any time, with or without cause, and with or without notice.

Hence the answer to this question is At will employment

5 0
3 years ago
Read 2 more answers
1. National Computers, Inc., was incorporated in Nebraska, has its main office in Kansas, and does business in Missouri. Nationa
Gwar [14]

<u>National Computers, Inc., was incorporated in Nebraska, has its main office in Kansas, and does business in Missouri. National is subject to the jurisdiction of </u>( a)Nebraska, Kansas, and Missouri

Explanation:

<u>There are certain Jurisdiction Based on Real Property Ownership  which are limited and are termed as "in rem" jurisdiction</u>

A state( Kansas ,Missouri) has limited jurisdiction (which lawyers term as  "in rem" jurisdiction) over a non-resident person or business that owns real property in the state. The Jurisdiction  is limited in two ways:

  • Jurisdiction is applicable only to the fair market value of the real property. This means that if you sue a non-citizen who owns an business  worth $800,000, then in this case  ,your judgment can be worth is $800,000.
  • Also if , the claim  is  related to the property. For example, if you met an accident on the property of a non-resident owner of an business house, you could get jurisdiction over the owner. But you could probably not get jurisdiction over the non-resident owner if the lawsuit grows out of an entirely separate problem that has nothing to do with the apartment house.
4 0
3 years ago
what are two significant strengths that can have an impact on your overall success? why do you think so?
Marina CMI [18]
I’d say bad experience or struggles you have went through can strengthen you
5 0
3 years ago
Which is not a reason for supporting ethical relativism?
raketka [301]

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4 0
3 years ago
A $1,000 face value bond is currently quoted at 101.2. the bond pays semiannual payments of $28.50 each and matures in six years
goblinko [34]
Coupon rate is the yearly interest earned by a loan and it can be calculated with

C = \frac{i}{p}

where i is the annual interest and p is the par value of the bond or the initial loan amount.

For this particular case, since the semiannual payment is $28.50, then the annual payment is 2 x 28.50 = $57.00.

Thus, we have 

C = \frac{57}{1000} = 0.057

From this, the coupon rate is 0.057 x 100% = 5.7%.
Answer: 5.7%

7 0
3 years ago
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