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lora16 [44]
3 years ago
7

An investor holds a 6% callable bond purchased at 105. If the issuer calls the bond before maturity, the yield to call (YTC) rea

lized by the investor would be A) equal to the yield to maturity (YTM). B) less than the coupon. C) greater than the yield to maturity (YTM). D) greater the current yield (CY).
Business
1 answer:
myrzilka [38]3 years ago
7 0

Answer: less than the coupon

Explanation:

When a bond that is bought at a premium of 205 is called before the bond matures by the issuer, this implies that the accelerated premium loss will have to be reflected in calculated yield to maturity.

It should also be noted that the YTC is the lowest among the yields for the premium bonds. Therefore, if the issuer calls the bond before maturity, the yield to call (YTC) realized by the investor would be less than the coupon.

Option B is correct.

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Mobile networks and infrastructure have the potential to reduce healthcare costs. Tracking medical equipment and hospital invent
3241004551 [841]

Answer:

Okay, of all your choices it is most definitely going to be RFID tagging

Explanation:

4 0
3 years ago
On May 15, 2000 you enter into a 1-year forward rate agreement (FRA) with a bank for the period starting November 15, 2000 to Ma
Artyom0805 [142]

Answer:

a.

3.51%

b.

0%

Explanation:

a.

First, we need to calculate the YTM of 6 months zero-coupon bond by using the following formula

Price = Face value / ( 1 + YTM )^numbers of years

96.79 = 100 / ( 1 + YTM )^1

1 + YTM = 100 / 96.79

1 + YTM = 1.0331646

Now calculate the YTM of 1 Year zero-coupon bond

93.51 = 100 / ( 1 + YTM )^1

YTM = 1.0331646 - 1

YTM = 0.0331646

YTM = 3.31646%

YTM = 3.316%

1 + YTM = 100 / 93.51

1 + YTM = 1.06940

YTM = 1.06940 - 1

YTM = 0.06940

YTM = 6.940%

YTM = 6.94%

Hence the forward rate is calculated as follow

Forward rate = [ (1 + YTM of 1 year zero coupon bond ) / ( 1 + YTM of 6 months year zero coupon bond ) ] - 1 = ( 1 + 6.94% ) / ( 1 + 3.316% ) = [ 1.0694 / 1.03316 ] - 1 = 1.03508 - 1 = 0.03508 = 3.508% = 3.51%

b.

At the time of inception the formward rate is 0.

7 0
2 years ago
How much does the United States government make in taxes?
jeka57 [31]
<span>Government Revenue: the Sources. The governments in the US collect about $4.2 trillion in a year income and payroll taxes. Income tax is where governments collect the most tax: in federal, state, and local income tax they will collect about $2.6 trillion in 2018.</span>
5 0
3 years ago
Which of the following was not one of Reagan's four major policy objectives during his presidency?
AlekseyPX

Answer: D.reduce the rising taxes for middle-class citizens

Explanation:

During the tenure of President Ronald Reegan when he was the president of the United States,he promoted some economic policies which were often referred to as Reaganomics.

These policies include:

A.reduce government regulation

B. reduce federal income tax and capital gains

C.reduce growth of government spending

E.reduce inflation by controlling growth of the money supply to reduce inflation ​

It should be noted that option D "reduce the rising taxes for middle-class citizens" isn't among the policies put forward by Reegan.

6 0
3 years ago
Suppose you bought a bond with an annual coupon rate of 7.4 percent one year ago for $897. The bond sells for $926 today. a. Ass
stiv31 [10]

Answer:

Total dollar return is $103.00

Explanation:

The total dollar return on the investment comprises of the increase in price as well as the annual coupon of 7.4% of face value received over the holding period of one year.

annual coupon=face value*coupon rate=$1000*7.4%=$74.00

increase in bond's price=$926-$897=$29.00  

Total dollar return on investment=$74.00+$29.00  

Total dollar return on investment=$103

8 0
2 years ago
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