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mezya [45]
3 years ago
12

A 5.75 percent coupon bond with 10 years left to maturity is priced to offer a 6.5 percent yield to maturity. You believe that i

n one year, the yield to maturity will be 6.0 percent. What is the change in price the bond will experience in dollars
Business
1 answer:
balu736 [363]3 years ago
4 0

Answer:

The change in price is $36.91  

Explanation:

Using the present value pv formula in excel the price of the bond now and in one year's time can be computed:

=pv(rate,nper,pmt,fv)

rate is the yield to maturity which is 6.5% and 6% respectively

nper is the number of years to maturity which is 10 years and 9 years respectively

pmt is the periodic payment of coupon 5.75%*$1000=$57.5

fv is the value receivable on redemption which is $1000 in both cases

=pv(6.5%,10,57.5,1000)

pv=$946.08  

=pv(6.00%,9,57.5,1000)

pv=$983.00  

Change in price =$983.00 -$946.08  =$36.91  

Find attached.

Download xlsx
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According to the consumer decision process, after consumers recognize the need for a product, they then engage in:.
lions [1.4K]

Answer:

An information search.

What is information search?

is a stage in the Consumer Decision Process during which a consumer searches for internal or external information.

4 0
3 years ago
David contributes investment land with a basis of​ $24,000 and an FMV of​ $40,000 to a partnership for a​ 10% interest in partne
creativ13 [48]

Answer:

C) $1,200 capital gain.

Explanation:

David's basis  on the land was $24,000

liability assumed by other partners = $30,000 x  (1 - 10%) = $27,000

liability assumed by  David on the partnership's other liabilities = $18,000 x 10% = $1,800

David's gain = liability assumed by other partners ($27,000) - land basis ($24,000) - additional liability assumed by David ($1,800) = $1,200 gain

When a partner contributes property to a partnership, his/her gain or loss must be determined using the asset's basis, not the fair market value.

4 0
3 years ago
You won a lottery! To collect your winnings you will be paid annual amounts of $11,300 for each of the next 21 years. The approp
Stella [2.4K]

Answer:

Difference = $9773.02

Explanation:

An annuity is a series of cash flows or payments that are of constant amount, occur after equal intervals of time and are for a limited and defined period of time. Thus, the winnings from lottery are an annuity as they pay a fixed amount $11300 every year for 21 years.

The annuity can be of two types namely ordinary annuity and annuity due. In ordinary annuity the cash flows occur at the end of the period and in annuity due, the cash flows occur at the beginning of the period. When we calculate the present value of these cash flows, it is understood that the present value of annuity due is greater than the present value of ordinary annuity.

The formulas for the present value of both ordinary annuity and annuity due are attached.

In the formula, R is the annuity payment or cash flow and i is the relevant interest rate and n is the number of years or periods.

PV of annuity ordinary = 11300 * [ (1 - (1+0.1)^-21) / 0.1 ]

PV of ordinary annuity = $97730.24548 rounded off to $97730.25

PV of annuity due = 11300 * [ (1 - (1+0.1)^-21) / 0.1 ] * (1+0.1)

PV of annuity due = $107503.27

Difference = 107503.27 - 97730.25

Difference = $9773.02

5 0
4 years ago
Marco was an economics major in college until he discovered he could major in strength and conditioning. Then he switched majors
Liono4ka [1.6K]

n the video, Marco says he was an economics major in college until he discovered he could major in strength and conditioning. Then he switched majors. Clearly, learning about this field is important to him. Mike and Bob are addressing ............... when they send Marco to seminars instead of, for example, increasing his salary in exchange for his continued high performance at MBSC. They could maintain Marco’s high level of motivation by:........................

A. Sending him on an all-expense-paid Caribbean cruise for two weeks

B. Reimbursing his tuition as he seeks a master’s degree in fitness management

C. Reassuring him that he has a job with MBSC as long as he performs well

D. Setting up an employee discount program at a nearby coffee shop, laundromat, and tasalon

Answer:

Valence

C. Reassuring him that he has a job with MBSC as long as he performs well

Explanation:

By sending Marco to seminars, Mike and Bob are addressing VALENCE;  a psychological value  an individual put on  another person, in relation to the attractiveness of individual whose a psychological value has been placed. In this case, a psychological value placed on Macro by his managers is the valuable rewards they would get from his professional development, rather than increasing his salary in exchange for high performance.

Therefore, they could maintain Marco’s high level of motivation by reassuring him that he has a job with MBSC as long as he performs well.

7 0
3 years ago
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jek_recluse [69]
Your answer will be either A or B hope this helps.

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