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Finger [1]
3 years ago
15

A 30-year Treasury bond as a face value of $1,000, price of $1,200with a $50 coupon payment. Assume the price of this bond decre

asesto $1,100 over the next year. The one-year holding period return is equal to:
A) -9.17%
B) -8.33%
C) -4.17%
D) -3.79%
Business
2 answers:
RSB [31]3 years ago
4 0

Answer:

C) -4.17%

Explanation:

The return received on the asset in the period in which it is held is called holding period return. It included the interest / dividend received and change in the initial price and current price.

According to given data

Initial Price of Bond = $1,200

Current Value of the bond = $$1,100

Yearly Coupon Payment =  $50

Formula for Holding Period Return

HPR = [ Income + [ ( Expected value - Initial Value ) ] / initial value

HPR = [ Coupon Payment + [ ( Current Value - Initial Value ) ] / initial value

HPR = [ $50 +  ( $1,100 - $1,200 ) ] / $1,200

HPR = [ $50 - $100 ] / $1,200

HPR = -$50 / $1,200

HPR = -0.0417 = -4.17%

mr Goodwill [35]3 years ago
3 0

Answer:

The one-year holding period return is equal to -4.17%, so the right answer is C.

Explanation:

In order to calculate the the one-year holding return we would have to use the fomula for  Holding Period Return (HPR), which is the following:

HPR = Current Yield + Capital Change

Current Yield = Yearly Coupon Payment / Price Paid = 50/1200

Capital Change = (New Value-Old Value)/Original Value = (1100 - 1200)/1200 = -100/1200

HPR = (50-100)/1200 = -0.4166 = -0.417%

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Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the
Eduardwww [97]

Answer:

Split-off point:

The split-off point is the point at which products from the joint process appear and are identified.  The costs which are incurred up to the split-off point are called joint costs and the costs that are incurred after the split-off point are called as

Separable costs. Some joint products which emerge from joint process can be sold at the split-off point or some products can be put to further processing.

Compute the profit or loss from the three products as shown below'

Description                                                              A               B               C

Selling price after further processing                    20              13              32

Selling price at the split off point                            16               8        25

Incremental revenue per pound or gallon             4               5         7

Total quarterly output in pounds or gallons     $15,000    $20,000    $4,000

Total incremental revenue                              $60,000   $100,000  $28,000

Total incremental processing costs              $63,000   $80,000  $36,000

Total incremental profit or (loss)                       ($3,000) $20,000  ($8,000)

Therefore the products A and C are need to be sold at the split off point and he product B should be processed further to earn good profits.  

3 0
3 years ago
Future Clothes Inc., a publicly traded company, designs and manufactures wearable technology. What approach should Future Clothe
olganol [36]

Answer:

The interpretation of the discussion is characterized throughout the explanation segment below.

Explanation:

  • Concentrate on an investigation as well as implementation or enhancement as something with a category or manner of price-free competitive advantage.
  • With more than just related diversification, there is much less inflationary pressure as well as the corporation or manufacturer should start concentrating on non-price competitive advantage throughout the opportunity to expand mostly on the supply chain.

So the answer here is just the appropriate one.

5 0
3 years ago
You are considering a project and are concerned about the reliability of the cash flow forecasts. To reduce any potentially harm
Nuetrik [128]

Answer: A. Lowering the degree of operating leverage.

Explanation:

The degree of operating leverage measure how much the earnings from a project will change as a result of sales.

If you are worried about the cash flow forecasts, it would be best to lower the operating leverage so as to reduce the forecasting error associated with the project. If the operating leverage is high then a small change in sales could impact income in a relatively huge way. By reducing the DOL, the cashflow from the project is easier to forecast and therefore more reliable.

8 0
3 years ago
Aryn is a music fan, and she enjoys learning about how speakers and sound systems are wired. She is reading books
Lana71 [14]

Answer:

an apprenticeship done on the job

Explanation:

An apprenticeship is a method for tutoring new practitioners of a profession.  It entails on-the-job training coupled with some study (classroom work and reading). Apprenticeship is provided by a skilled, experienced, and licensed professional. The apprentice gets to learn practical aspects of a profession while earning.

Aryn would be best with an apprenticeship as she will not spend a lot of time in class. She will, however, acquire the skills she needs. Some apprenticeship may lead to certification.

4 0
3 years ago
you wish to buy a $25,000 car. the dealer offers you a 4-year loan with a 9 percent apr. what are the monthly payments?
NeTakaya

In order to buy a car worth $25,000 a monthly payment of $622.12 is required.

Mortgages are one type of loan that frequently has a structure that calls for a stream of identical monthly payments. The lender can assess whether the customer's budget can support equal monthly payments by doing so.

Suppose the monthly payment is M.

With 9 percent APR, the effective monthly rate is 9%/12 = 0.75%.

There will be 12 x 4 years, or 48 monthly payments.

The face value of the loan must be equal to the present value of these monthly payments, or

{}\sum_{t=1}^{48}{\frac{M}{(1 + 0.75\%)^t}} = 25,000, {}

which yields M = 622.12.

If you only paid interest, the monthly payment would be calculated as follows: principal * monthly interest rate (9% /12) = 25,000*0.75% = 187.5.

The results would be that after five years, you would still owe the whole amount of $25,000 and would have to pay $11,250 in interest.

Learn more about loans:

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4 0
1 year ago
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