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Zina [86]
3 years ago
6

You own a fixed-income asset with a duration of five years. If the level of interest rates, which is currently 8%, goes down by

10 basis points, how much do you expect the price of the asset to go up (in percentage terms)
Business
1 answer:
I am Lyosha [343]3 years ago
5 0

Answer:

0.4629%

Explanation:

Given:

Duration of fixed assets (D) = 5 year

Interest rate (r) = 8% = 8/100 = 0.08

Decrease in Interest rate point(ΔY) = 10 basis = 10/100 = 0.01%

Computation:

D* = D / (1 + r)

D* = 5 / (1 + 0.08)

D* = 5 / 1.08

D* = 4.6296

Computation:

ΔP/P = D* × ΔY

= 4.6296 × 0.01%

= 0.4629%

Therefore, Price of the assets go up to 0.4629%.

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<span>“The mitochondria is the power house of the cell” A powerhouse that we all should be mindful about and to take care of our own.</span>

5 0
4 years ago
Louise has been a child care provider for one year. She works out of her home and cares for five children. She completed a train
Lerok [7]

Answer: D

Explanation:

6 0
3 years ago
1. Population groups philosophy
makkiz [27]

Answer:

1. Population groups: target groups

2. Mission statement: philosophy

3. Human services: social services

Explanation:

This is the best way to connect these terms. A population group refers to a section of the population that is discussed or targeted in a particular project or campaign. These can refer to ethnicities, ages, or some other social characteristic. A mission statement refers to a phrase or an idea that drives the work of a particular organization. Finally, human services refers to a range of social services that are usually provided by the government or by organizations. These usually include services such as healthcare or education.

8 0
3 years ago
Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years
Natali5045456 [20]

Answer: -12.1%

Explanation:

Bond Sam was priced at Par which means it could have been priced at $1,000 and its yield was the same as the coupon rate of 8%.

If interest rates rise by 5%, the yield becomes:

= 8% + 5%

= 13%

Price of bond is attached:

Yield = 13% /2 = 6.5% per semiannual period

Coupon = 8% * 1,000 * 0.5 = $40 per semi annual period

Period till maturity = 3 * 2 = 6 semiannual periods

Price = $878.97

Percentage change in price:

= (878.97 - 1,000) / 1,000 * 100%

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4 0
3 years ago
At March 1,2020, Candy inc. Had supplies on hand of $500. During the month Candy purchased supplies of $1200 and used supplies o
solong [7]

Answer: The March 31 adjusting journal entry shoud include $1200

Explanation: Given that the

Supplies on hand = $500

Candy purchased supplies of $1200 and used supplies of $500

The unused supplies will be:

1200 - 500 = 700 dollars

The March 31 adjusting journal entry shoud include the addition of the supplies on hand and the unused supplies. That is,

500 + 700 = 1200 dollars

8 0
4 years ago
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