Answer:
The truth about Macaulay Duration and Modified Duration is:
d. All are true.
Explanation:
Principally, the Macaulay Duration, used mainly with immunization strategies, measures the weighted average time an investor holds a bond until the period when the present value of the bond’s cash flows equals to the initial bond amount.
On the other hand, the Modified Duration, providing a risk measure by being sensitive to interest rates, identifies the amount by which the duration changes for each percentage change in the yield and, at the same time, measures how the amount of a change in the interest rates impacts a bond's price.
Answer:
c. Bill is the superintendent of schools, and John is the chair of the school board
Explanation:
Bill is the superintendent of schools, and John is the chair of the school board
Answer:
A) total debt = $2,230,000 and it represents 175,000 - 125,000 = 50,000 outstanding shares
price per share = $2,230,000 / 50,000 = $44.60 per share
B) enterprise value = 175,000 x $44.60 = $7,805,000
According to M&M proposition I, the enterprise value is the same with or without any outstanding debt. So the company's value is the same for both alternatives.
Answer: $12477.27
Explanation:
The formula to find the compound amount after t years (compounded semiannually) :-
Given : Principal amount : P = $ 8,000
Rate of interest : 
Time : 9 years
Now, 
The final amount in the account will be $12477.27
Answer:
Explanation:
Coupon rate = 5.07%
Yield to maturity = 4.84%
Rate = Yield/2 = 2.42%
N = 14 = 14*2 semiannually = 28 semiannually
Face value = $1000
PMT = (face value*coupon rate)/2 = $25.35
Need to find price which is PV
Using the financial calculator, PV = $1023
Number of bonds to be issued = 41,000,000/1023 = 40,078
