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Lelu [443]
3 years ago
11

On October 5, 2019, you purchase a $14,000 T-note that matures on August 15, 2031 (settlement occurs two days after purchase, so

you receive actual ownership of the bond on October 7, 2019). The coupon rate on the T-note is 4.388 percent and the current price quoted on the bond is 105.65625 percent. The last coupon payment occurred on May 15, 2019 (145 days before settlement), and the next coupon payment will be paid on November 15, 2019 (39 days from settlement).a. Calculate the accrued interest due to the seller from the buyer at settlement.b. Calculate the dirty price of this transaction
Business
1 answer:
Scrat [10]3 years ago
8 0

Answer:

a: 247.43 interest

b: 15,039.31 dirty price of the purchase

Explanation:

We purchase the note at the quoted price plus the accrued interest at the time:

<u>accrued interest:</u>

principal x rate x time

we express time as a portion of year.

14,000 x 4.388% x 145/360 = $  247.4344

<u>note market price:</u>

14,000 x 105.65625/100 = 14,791.875

<u>dirty price: </u>

  principal + interest

14,791.875 + 247.4344 = 15,039.31

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Answer: Yes it does

Explanation:

The investment advisors say that the market rarely declines three years in a row.

Since 1872, it has declined two years in a row 8 times and three years in a row, only twice.

This means out of 8 times, it declined twice. Percentage of times it declined was:

= 2 / 8 * 100%

= 25%

25% while not rare, is a good enough percentage to trust the advice of the investment advisors.

6 0
3 years ago
A bank loan has been given to a customer at a bank with a FIXED nominal interest rate of 13%. The real
dmitriy555 [2]

Answer:

The new real interest rate is 15%

and the lender was hurt.

O 15%; lender

Explanation:

a) Data and Calculations:

Fixed nominal interest rate = 13%

Real interest rate for the bank's profit margin = 10%

Inflation rate = 3% (13% - 10%)

Unanticipated inflation rate = 7%

Nominal interest rate = 17% (10% + 7%)

But the bank could not increase its fixed nominal interest rate to match the nominal interest rate.

6 0
3 years ago
Zachary Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the compan
Svet_ta [14]

Answer:

IRR = 8%

Don't accept the project

Explanation:

The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

IRR can be calculated using a financial calculator:

Cash flow in year 0 = -9,187,846.67

Cash flow each year from year 1 to 11 = 1287000

IRR = 8%

Because the IRR is less than the hurdle rate, the project shouldn't be accepted.

To find the IRR using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.

I hope my answer helps you

6 0
3 years ago
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Cate is the daughter of a Senator and the former CEO of a Fortune 500 company. Harry grew up on a farm, tilling the land for a l
Jobisdone [24]

Answer:

They will have an Exogamous marriage.

<u>Explanation </u>

Exogamous marriage or exogamy is the custom of marrying outside a predetermined group of individuals to which an individual has a place. Additionally, blood family members, union with individuals from a particular totem, clan(s), or other groups might be prohibited. Something contrary to exogamy is endogamy. Exogamy was acquainted with averting marriage between blood relations, particularly among siblings and sisters, which had been standard in a past condition of indiscrimination.

4 0
4 years ago
Price leadership is legal in the United States, whereas price-fixing is not. This is because price leadership is not an agreemen
OverLord2011 [107]

Answer:

This is because price leadership is not an agreement, whereas price-fixing is.

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Price fixing is a type of collusion (and yes, collusion is illegal). Price fixing is an illegal business practice where competing firms agree upon increasing, decreasing or maintaining the price of certain goods or services. In the US, competing firms must establish their prices by themselves without consulting or agreeing with their competition.

3 0
3 years ago
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