A company sells children’s sleds for $70 each. The firm has variable costs per unit of $35 and total fixed costs of $120,000. Wh
1 answer:
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Answer:
Explanation:
a. If you believe that the term structure next year will be the same as today’s, calculate the return on (i) the 1-year zero and (ii) the 4-year zero.
b. Which bond provides a greater expected 1-year return? O 1-year zero-coupon bond O 4-year zero-coupon bond
The return on one year bond is = 5.2%
The price of 4 year bond today
Price of 4 year bond today = 807.22
If yield curves is unchanged, the bond will have 3-year maturity and price will be
If yield curves is unchanged, the bond will have 3-year maturity and price will be = 854.04
Return
Return = 5.8%
The longer term bond has given the higher return in this case at it's YTM fell during the holding period(4 -year)
Answer:
$ 29.018 ( approx )
Explanation:
The amount formula in compound interest,
Where,
P = principal amount,
r = rate per period,
t = number of periods,
Here, P = $ 3260.00,
Since, the amount is compounded monthly,
So, the number of periods in 3 months, t = 3,
Also, annual rate = 3.55 % = 0.0355,
So, the rate per month, r = (∵ 1 year = 12 months)
Thus, the amount after 3 months,
Hence, the total interest earned,
I = A - P =3289.018 - 3260 = $ 29.018