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mafiozo [28]
3 years ago
5

The yield to maturity on a coupon bond is _____.(A) always greater than the coupon rate.(B) the rate an investor earns if she ho

lds the bond to the maturity date, assuming she can reinvest all coupons at the current yield.(C) the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the yield to maturity.(D) only equal to the internal rate of return of a bond when the bond is priced at par.(E) greater than both the current yield and coupon rate when the bond is priced at a premium to par.
Business
1 answer:
Andrej [43]3 years ago
5 0

Answer:

The answer is (C) the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the yield to maturity.

Explanation:

Yield to maturity is the internal rate of return for investor if he/she holds the bond to maturity. In other words, it is the discount rate that brings net present value of the coupons and principal repayment received from the current time to bond maturity equal to its current bond's price ( thus, assuming all the coupon can be reinvested at the yield to maturity). So, (C) is the correct choice.

(A) is not correct because Yield to maturity can be either higher, lower or equal to coupon rate.

(B) is not correct because the assumption is all the coupons can be reinvested at yield to maturity, not current yield.

(D) is not correct because yield to maturity is the internal rate of return of the bond given the bond is hold until maturity.

(E) is not correct because bond is priced at premium to par when yield to maturity is lower than its coupon rate.

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The <u>eclectic paradigm</u> argues that combining location specific assets or resource endowments and the firm's own unique assets often requires FDI.

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Someone who provides you with recommendations related to your money and investments would be called a...
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Vulcan, Inc., has 8.7 percent coupon bonds on the market that have 10 years left to maturity. The bonds make annual payments and
Lana71 [14]

Answer:

$880.72

Explanation:

Bond price will be calculated by following formula

Bond Price = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F x ( 1 + r )^-n ]

Bond Price = $87 x [ ( 1 - ( 1 + 0.107 )^-10 ) / 0.107 ] + [ $1,000 x ( 1 + 0.107 )^-10 ]

Bond Price = $87 x [ ( 1 - ( 1.107 )^-10 ) / 0.107 ] + [ $1,000 x ( 1.107 )^-10 ]

Bond Price = $87 x [ ( 1 - ( 1.107 )^-10 ) / 0.107 ] + [ $1,000 x ( 1.107 )^-10 ]

Bond Price = $518.87 + $361.85

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6 0
2 years ago
A _____ is subsidiary to the work-in-process account and is the primary document for accumulating all costs related to a particu
OlgaM077 [116]

Answer:

correct option is b. job-order cost sheet

Explanation:

A job order cost sheet is subsidiary to work in process

because job-order cost sheet are the documents that is use for record the manufacture cost.

and all necessary and important detail of cost & job is written in job cost sheet

and it is also accounting record of the company  

so here given that primary document for accumulate all cost related to a particular task

so correct option is b. job-order cost sheet

8 0
3 years ago
The industrial organization (I/O) model of above-average returns:
lara [203]

Answer:

The answer is A) Puts emphasis on the external environment, which plays a role in determining a company´s ability to achieve above-average returns.

Explanation:

The I/O Model of Above-Average Returns basically assumes that the industry in which a company decides to compete in has a much larger influence on performance (earnings and profit) than the choices the managers of this company make.

The basic assumptions of this organization model are:

  • The external environment imposes pressures and constraints that determine the strategies of the company and will result in above average returns.
  • It assumes competing companies control similar strategically relevant resources and pursue similar strategies.
  • Resources are highly mobile across companies, so that any differences that might develop between companies will be short-lived.
  • Decision-makers within the company are assumed to be rational and committed to acting in the company´s profit-maximizing behaviors.

8 0
3 years ago
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