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solong [7]
3 years ago
7

Two 20-year corporate bonds are issued at par, with stated interest rates of 10%. One issue is puttable at par in 5 years, while

the other is puttable at par in 10 years. If interest rates rise by 200 basis points shortly after issuance, which statement is TRUE?
a. The bond puttable in 5 years will depreciate more than the bond puttable in 10 years
b. The bond puttable in 10 years will depreciate more than the bond puttable in 5 years
c. Both bonds will depreciate by equal amounts
d. The rate of depreciation depends on the credit rating of the bonds
Business
1 answer:
True [87]3 years ago
8 0

Answer:

b. The bond puttable in 10 years will depreciate more than the bond puttable in 5 years

Explanation:

Data provided in the question

20 -year corporate bond i.e issued at par at 10%

One issue is for 5 years

other issue is for 10 years

Now if the interest rate rise by 200 basis points

So,

Based on the above information

If a bond is issued at a future date, any price drop due to higher interest rates will be eliminated as the holder is able to return the bond to the issuer earlier

Hence, the option B is correct

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Olenka [21]
First answer - am i willing to share profits with other people

second answer: franchisee

third answer: good records
7 0
2 years ago
if the marginal propensity to save is 0.12 the marginal propensity to consume(mpc) is the multiplier is
Vlad [161]

Answer:

If the marginal propensity to save is 0.12, the marginal propensity to consume(mpc) is 0.88, and the multiplier is 8.33.

Explanation:

From the question, we are given the following:

mps = Marginal propensity to save = 0.12

The marginal propensity to consume (mpc) and the multiplier can therefore be calculated as follows:

mpc = 1 - mps ........................ (1)

Substituting the values for mps into equation (1), we have:

mpc = 1 - 0.12

mpc = 0.88

Also, we have:

Multiplier = 1 / mps ..................... (2)

Substituting the values for mps into equation (2), we have:

Multiplier = 1 / 0.12

Multiplier = 8.33

Therefore, if the marginal propensity to save is 0.12, the marginal propensity to consume(mpc) is 0.88, and the multiplier is 8.33.

8 0
3 years ago
A machine is available 10 hours a day. Each part takes 90 minutes to fabricate and 10 minutes to setup. 10% of the parts made ar
Kazeer [188]

Answer:

Effectiveness = 0.75

Explanation:

Availability time for a each day = 10 hr = 600 minutes

Total time for fabricating is given as 90 minutes'

Total time to set up one part 10 minutes

Total parts made in each single day 5

Percentage of defective part 10%

Total production time for a single part = setup time  + fabricated time

                                                                 = 10+ 90 = 100 min

Production time for 5 part =5 × 100 = 500 minutes

Total number of defective parts =  10% of 5  =  0.5 parts

Time to replaced defective = 0.5  × 100 = 50 min

Value added time = 500 - 50 = 450 min

Effectiveness  is given as

Effectiveness  = \frac{value\ added\ time}{ total\ time\ taken}

Effectiveness = \frac{450}{600} = 0.75

8 0
3 years ago
Would you expect a brick-and-mortar retailer or an online retailer to have a higher asset turnover? Why or why not? Which supply
Serggg [28]

Answer:

An online retailer would on a balance of probability have a higher asset turnover than a brick-and-mortar retailer.

Explanation:

 

The reason is not farfetched. If done properly, an online retailer is most likely to succeed at reaching more customers and penetrating more markets.

The total population of active internet users is currently estimated at 4.5 Billion. For truly global products or retail outlets such as Amazon and Alibaba, this figure is staggering. It is impossible to compare a truly successful online retailer to a brick-and-mortar retailer whose market, at its best, covers only those within its locality.

So using online retail store such as Amazon as an example, they might have significant investment in online platforms, dedicated servers and warehouses, their turnover which as at 2019 stood at 4.5x is relatively strong.

The supply chain drivers which impact asset turnover are inventory, accounts receivables and facilities.

Cheers!

5 0
3 years ago
One reason Congress expanded the exclusion of gain on the sale of a principal residence and eliminated the deferral provision wa
posledela

Answer:

The answer is:

If the gain resulting from selling their principal residence exceeds $500,000 for a married couple or $250,000 for a single filer.

The taxpayer doesn't qualify for the capital gains exclusion (e.g. maybe sold another property during the last year)

The taxpayer uses his principal residence for rental or commercial uses and depreciation may be allowed.

8 0
3 years ago
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