1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
lara31 [8.8K]
3 years ago
7

The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond

before it matures, your realized return is known as the holding period yield (HPY).
Requirement:
1. Suppose that today you buy a bond with an annual coupon rate of 8% for $1,170. The bond has 16 years to maturity. What rate of return do you expect to earn on your investment? Assume a par value of $1,000.
2. Two years from now, the YTM on your bond has declined by 1%, and you decide to sell.
A) What price will your bond sell for?
B) What is the HPY on your investment?

Business
1 answer:
True [87]3 years ago
6 0

Answer and Explanation:

The computation of each part is to be shown in the attachment. The one statement is of final values and the other one is of formula sheet.

This one applied for all the things which need to be find out

Kindly find the attachment below:

We use the RATE formula for determining the rate of return and the same is to be considered

You might be interested in
Stella is currently spending all of her weekly income purchasing the two goods that she likes cookies and milk. She is currently
Ivan

Answer:

Stella should consume less of milk and more of cookies to maximize total utility.

Explanation:

The price of cookies is ​$9​, and the price of milk is ​$3.

Stella consumes 10 cookies and 5 cartons of milk.

The marginal utility of 10th cookie is 50 utils and the marginal utility of 5th carton of milk is 25 utils.

Her total utility will be maximized if the ratio of marginal utility and price will be equal for both cookies and milk.

Ratio for cookies

= \frac{MUx}{Px}

= \frac{50}{9}

= 5.55

Ratio for milk

= \frac{MUy}{Py}

= \frac{25}{3}

= 8.33

Since the ratio is higher for milk, it means that Stella should consume less of milk and more of cookies to maximize total utility.

8 0
3 years ago
You have been managing a $5 million portfolio that has a beta of 1.05 and a required rate of return of 9.775%. The current risk-
Lilit [14]

Answer:

9.62%

Explanation:

Re = Rf + (B x Rp)

Re = cost of equity = 9.775%

Rf = risk free rate = 4%

B = beta = 1.05

Rp = risk premium = ?

Rp = (Re - Rf) B = (9.775% - 4%)/1.05 = 5.5%

Re portfolio = Rf + {Rp x [(B₁ x $5/$5.5) + (B₂ x $0.5/$5.5)]}

Re portfolio = 4% + {5.5% x [(1.05 x $5/$5.5) + (0.75 x $0.5/$5.5)]}

Re portfolio = 4% + {5.5% x [0.9545 + 0.0682]}

Re portfolio = 4% + 5.6249% = 9.62%

6 0
3 years ago
Define an informal business
Katena32 [7]
The informal<span> sector refers to those workers who are self employed, or who work for those who are self employed. People who earn a living through self employment in most cases are not on payrolls, and thus are not taxed. Many </span>informal<span> workers do their </span>businesses<span> in unprotected and unsecured places.</span>
7 0
3 years ago
DW has an ending Retained Earnings balance of $51,600. If during the year DW paid dividends of $4,100 and had net income of $21,
VikaD [51]

Answer:

$34,600

Explanation:

The computation of beginning retained earnings balance is seen below:

But we know that;

Ending balance of retained earnings = Beginning balance of retained earnings + Net income - Dividend paid

$51,600 = Beginning retained earnings + $21,100 - $4,100

Beginning retained earnings = $51,600 - $21,100 + $4,100

Beginning retained earnings = $34,600

4 0
3 years ago
Donaldson Company has the following accounts in its general ledger at July 31: Accounts Receivable $40,000 and Allowance for Dou
alisha [4.7K]

Answer and Explanation:

The journal entries are shown below:

On Oct 15

cash Dr $21,000

Service charge expense Dr (3% of $30,000) $9,000

    To Account receivable $30,000

(being the cash is recorded)

On Oct 25

cash Dr $882

Service charge expense Dr (2% of $900) $18

    To Sales $900

(being the cash is recorded)

These two entries should be recorded

8 0
3 years ago
Other questions:
  • In an imperfectly competitive labor market, the cost of labor inputs and the value of the products sold will _________ vary as m
    5·1 answer
  • Use the following data to determine the total dollar amount of assets to be classified as current assets.Koonce Office SuppliesB
    12·1 answer
  • Hich of the factors listed below does not cause the demand curve for labor to​ shift?
    9·1 answer
  • Blair Scott started a sole proprietorship by depositing $75,000 cash in a business checking account. During the accounting perio
    14·2 answers
  • Why is the monitoring and controlling phase extremely important to the
    15·1 answer
  • Which of the following statements is true of activity−based ​costing?
    6·1 answer
  • "A customer places an order to sell 100 shares of ABC at the market. The initial execution report shows the trade occurring at $
    12·1 answer
  • An investment offers $6,400 per year for 15 years, with the first payment occurring one year from now. If the required return is
    11·1 answer
  • Products that cost a lot of money but that people buy anyway because of the status and exclusivity that they project to others a
    5·1 answer
  • For what range in marginal cost will the firm continue to charge a price of $60?
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!