If a consumer segment generally holds a positive attitude toward owning the latest designer jeans, then that segment's attitude
2 answers:
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Answer:
a.
Percentage change in Bill Price = (91.8486 - 100) / 100 = -0.0815 or -8.15%
Percentage change in Bill Price = (78.1448 - 100) / 100 = -0.2186 or -21.86%
b.
Percentage change in Bill Price = (109.0298 - 100) / 100 = 0.0903 or 9.03%
Percentage change in Bill Price = (132.0946 - 100) / 100 = 0.3209 or 32.09%
Explanation:
To calculate the percentage change in the price of both the bonds, we assume that the par value of both the bonds is $100 each.
a.
To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,
Coupon Payment (C) both Bill and Ted = 100 * 0.058 * 6/12 = $2.9
Total periods (n) - Bill= 5 * 2 = 10
Total periods (n) - Ted= 25 * 2 = 50
As the bonds were previously price at par, the YTM or market interest rate would have been same as the coupon rate. Thus, the old market interest rate was 5.8%. Now as the interest rates have risen by 2% new interest rate will be = 5.8 + 2 = 7.8%
New r or YTM - both Bill and Ted = 7.8% * 6/12 = 3.9% or 0.039
The formula to calculate the price of the bonds today is attached.
Bond Price - Bill = 2.9 * [( 1 - (1+0.039)^-10) / 0.039] + 100 / (1+0.039)^10
Bond Price - Bill = $91.8486
Percentage change in Bill Price = (91.8486 - 100) / 100 = -0.0815 or -8.15%
Bond Price - Ted = 2.9 * [( 1 - (1+0.039)^-50) / 0.039] + 100 / (1+0.039)^50
Bond Price - Ted = $78.1448
Percentage change in Bill Price = (78.1448 - 100) / 100 = -0.2186 or -21.86%
b.
As the bonds were previously price at par, the YTM or market interest rate would have been same as the coupon rate. Thus, the old market interest rate was 5.8%. Now as the interest rates have fallen by 2% new interest rate will be = 5.8 - 2 = 3.8%
New r or YTM - both Bill and Ted = 3.8% * 6/12 = 1.9% or 0.019
The formula to calculate the price of the bonds today is attached.
Bond Price - Bill = 2.9 * [( 1 - (1+0.019)^-10) / 0.019] + 100 / (1+0.019)^10
Bond Price - Bill = $109.0298
Percentage change in Bill Price = (109.0298 - 100) / 100 = 0.0903 or 9.03%
Bond Price - Ted = 2.9 * [( 1 - (1+0.019)^-50) / 0.019] + 100 / (1+0.019)^50
Bond Price - Ted = $132.0946
Percentage change in Bill Price = (132.0946 - 100) / 100 = 0.3209 or 32.09%
Answer: Please refer to Explanation
Explanation:
The question seeks to find out the activity level of the above mentioned activities.
There are various activities in an organization and as such they need to be categorized. The various categories include Unit, Batch, Product, Customer, and Organizational.
Unit Activities refer to activities done on a unit level. A singular product level. They include things like putting a logo on a bottle or deriving a single person at a restaurant.
Batch Activities refer to activities done when Units are grouped together and form a batch. Activities done to that batch fall under here.
Product Level Activities refer to those done on a product wide scale. That means that when the entire product is affected, it falls under here. Examples include Product Advertising or Recall.
Customer Level Activities refer to those that an organization engages in for those entities that patronize them. Such activities are very important because the customer is the most important aspect of the business.
Then there are the Organizational level Activities. As the name implies, these are activities at an Organization wide level.
Classifying the above therefore,
A. Setting up a machine for a production run of 500 units. BATCH LEVEL ACTIVITY.
This deals with a group of units, 500 to be precise and so is a batch level activity.
B. Conducting a seminar for local doctors on the benefits of a new drug. PRODUCT LEVEL.
This seminar will speak on the product being the drug as a whole therefore it is product level.
C. Embossing a company logo on every product made. UNIT LEVEL.
This involves an individual unit at a time and so is at Unit Level.
D. Seating a party of 11 at a restaurant. BATCH LEVEL.
The 11 people to be served are individual units that have now been grouped together into one batch so is a Batch Level Activity.
E. Providing technical support for two years following a sale. CUSTOMER LEVEL ACTIVITY.
This is about providing help to the company's customers so it falls under Customer Level Activities.
F. Managing a corporation's accounting department. ORGANIZATIONAL LEVEL ACTIVITY.
This involves the Corporation's entire accounting department and so is Organizational level.
G. Attaching a price tag to each product. UNIT LEVEL.
Attaching prices will be done to each individual unit and so it a Unit level activity.
H. Issuing an invoice. CUSTOMER LEVEL ACTIVITY.
Issuing an invoice is done when a sale is complete. Sales are done to customers so this is a customer Level Activity.
I. Developing a corporate advertising campaign. ORGANIZATIONAL LEVEL ACTIVITY.
This is has to do with advertising the company as a whole and so is an Organizational level Activity.
J. Recalling a defective product. PRODUCT LEVEL ACTIVITY.
By recalling an entire product, this Activity falls under the Product Level because it deals with the product as a whole. For example, Toyota recalling all cars of a certain model for safety reasons.
