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Irina-Kira [14]
3 years ago
9

Find the price of a corporate bond maturing in 5 years that has a 5% coupon (annual payments), a $1,000 face value, and an AA ra

ting. A local newspaper's financial section reports that the yields on 5 year bonds are: AAA = 6%, AA = 7%, and A = 8%.
Business
2 answers:
zepelin [54]3 years ago
6 0

Answer:

$917.99

Explanation:

BP = Sum of discounted annual coupon payment + discounted face value

Coupon = 1000 × 0.05 = $50

The bond is AA reted so we use the 7% yiled

Sum of coupons

50/1.07)^1 +50/(1.07)² + 50/(1.07)³ + 50/ (1.07)^4 + 50/ (1.07)^5

=$205

Discounted face value =1000/ 1.07^5

=$712.98

BP = 205 + 712.99

    =$917.99

Ainat [17]3 years ago
3 0

Answer:

$917.996

Explanation:

First, we calculate price:

Price = 5% * 1000 = $50.

At the fifth year, Price = $1000 + $50 = $1050

The price of the Corporate bond is given as:

50/(1+.07) + 50/(1+.07)² + 50/(1+.07)³ + 50/(1+.07)⁴ + 1050/(1+.07)^5

= 917.9960512810481

=$917.996 ---- Approximated

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Let x be the part of 19,000 that was loaned out at 6% such that the remaining 19,000 - x was loaned out at 14%. The interest is calculated by the equation,

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If your job at the company is to improve existing products, you are probably using the ________ strategy.
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If your job at the company is to improve existing products, you are probably using the development strategy.

<h3>What is the development strategy?</h3>

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Hence we can say that If your job at the company is to improve existing products, you are probably using the development strategy.

Read more on development strategy here: brainly.com/question/27801561

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6 0
1 year ago
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4 0
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Answer:

I would say it is A

Explanation:

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3 years ago
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I don't know why but I feel like your questions are funny at the same time.

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