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malfutka [58]
2 years ago
8

5. An investor is interested in purchasing a 30-year U.S. government bond carrying an 8 percent coupon rate. The bond’s current

market price is $935 for a $1000 par value instrument. Suppose the investor sells the bond at the end of 13 years for $970. What is the holding-period yield? What is the effective yield?
Business
1 answer:
ella [17]2 years ago
5 0

Answer:

Holding period yield is 114.97%

effective yield is 8.72%

Explanation:

holding period yield=(Price at call-initial price+coupon payments)/initial price

                                =($970-$935)+(13*$80)/$935

                                 =($35+$1040 )/$935

                                 =$1075/$935

                                  =114.97%

The effective yield is the yield to call which can be computed using the excel rate formula:

=rate(nper,pmt,-pv,fv)

nper is the number of payments before the call which is 13

pmt is the periodic payment by bond which is $1000*8%=$80

pv is the current market price of $935

fv is the bond price at end of 13 years at $970

=rate(13,80,-935,970)

rate=8.72%

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<u>Explanation</u>

If A+B-C= 170 and B+C-A=130 ,  

=C+A = 130

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or, A+B =170+C

A+B = 170+130-A ( c=130-A)

A+B = 300-A

2A+B = 300

A+B= 300/2

A+B = 150

A+B-C= 170

A+B = 170+C

150 = 170 +C ( A+B = 150)

or, C = 20..............................(1.)

A+C =130

or,A+ 20= 130 ( A=110).....................(2)

A+B = 150

110+B= 150

B = 150-110

B= 40..........................................(3)

Therefore, A = 110, B= 40, C=20..

8 0
3 years ago
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sergejj [24]

Answer:

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Explanation:

Giving the following information:

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Indirect labor $ 30,000

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<u>The manufacturing overhead includes all indirect costs regarding production. </u>

<u></u>

Manufacturing overhead= 11,000 + 30,000 + 51,000

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3 years ago
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Maurinko [17]

Answer:

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5 0
2 years ago
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mrs_skeptik [129]

Answer:

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7 0
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