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spayn [35]
3 years ago
6

The yield to maturity on a bond is:

Business
1 answer:
Arada [10]3 years ago
4 0

Answer:

The correct answer is I, II and III.

Explanation:

The return that an investor earns with a bond can be calculated in different ways. The price of the bonds fluctuates with the change in interest rates, but once the investor buys a bond, the return is fixed. The yield to maturity is a way of providing the investor with the most accurate representation of the return he will receive for the holding of said bond.

Types of bond yield

Based on the current price, a bond shows three different types of maturity. The yield of the coupon is the interest rate paid by the bond at face value. A US $ 10,000 bond with a 6 percent interest coupon pays US $ 300 interest every 6 months. The current return is the coupon rate divided by the bonus price. If the bond with a nominal value of US $ 10,000 and a 6 percent coupon rate can be purchased for US $ 9,600, its current yield is 6.25 percent. The yield at maturity is the internal rate of return of the bond based on the time remaining for the bond's maturity.

Expiration Yield

The calculation of the yield at maturity amortizes the value of the premium or the discount (bonds over and under the pair) in the price of the bond throughout the life of the bond. For example, if the bond that pays 6 percent of the aforementioned coupon rate expires in 10 years, and is priced at US $ 9,600, the yield at maturity is 6,558 percent. If two bonds, one on the pair and one under the pair, have the same yield at maturity, any of them represents the same level of return for the investor. The yield at maturity is what the investor will receive if the bond is purchased at the current market price and held until maturity.

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In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining chairs per 5-day week
BaLLatris [955]
I believe the answer would be C.
 Because you are dividing the dining chairs by the number of workers... That would give you the total amount of chairs that each worker assembled. Then you divide that by the 5 days and you would get the number of chairs that each worker assembled each day.

So, the answer would be C

  
7 0
3 years ago
Read 2 more answers
If the marginal propensity to consume is equal to 0.85, then a $500 increase in disposable income leads to a:
AlekseyPX

The question is incomplete. The complete question is stated below.

If the marginal propensity to consume is equal to 0.85, then a $500 increase in disposable income leads to a:

a. $400 increase in consumption spending

b. $75 increase in consumption spending

c. $425 increase in personal saving

d. $75 increase in personal saving

Answer:

If a $500 increase causes an increase of $425 in consumer spending, the rest of $75 is the increase in personal saving. Thus, option D is the correct answer.

Explanation:

The marginal propensity to consume or MPC is the percentage of the additional income that will be used for consumption spending. It is a concept that is used to calculate how much of an increase in income will be used in consumption and saving. The formula to calculate MPC is,

MPC = Change in consumer spending / Change in income

0.85 = Change in consumer spending / 500

500 * 0.85 = Change in consumer spending

Change in consumer spending = $425

If a $500 increase causes an increase of $425 in consumer spending, the rest of $75 is the increase in personal saving.

8 0
3 years ago
Compute the payback for each of these two seperate investments:
fredd [130]

Answer:

a. 2.23

b. 3.21

Explanation:

a. Answer to Part A

Payback Period = Investment / Annual Cash Inflow

= 250000 / 112115

= 2.23

Answer to Part B

Payback Period = Investment / Annual Cash Inflow

= 200000 / 62375

= 3.21

Working Note

<em>Particulars                Case A     Case B </em>

After Tax Income  72115         39000

Add: Depreciation  40000       23375

Cash Inflow             11,2115         62375

<em>Particulars              Case A           Case B </em>

Cost of Machine     250000        200000

Less: salvage Value  10000         13000

Depreciable Value   240000        187000

Life of the Asset           6                  8

Annual Depreciation 40000         23375

8 0
3 years ago
It’s important to consider whether you should address an acquaintance formally or informally.
VARVARA [1.3K]

Answer:

True

Explanation:

Im sorry please forgive me I messed up big time

4 0
3 years ago
You observe that the inflation rate in the United States is 1.0 percent per year and that T-bills currently yield 1.5 percent an
Vedmedyk [2.9K]

Answer:

a) 4.5%

b) 7.5%

c) 9.5%

Explanation:

Given:

USA Inflation rate = 1.0%

T-bills current yield = 1.5%

a) What do you estimate the inflation rate to be in Australia, if short-term Australian government securities yield 5 percent per year?

To find the inflation rate in Australia, use the formula:

RUS - hUs = RFC - hFC

Where,

RUS = T-bills current yield = 1.5% = 0.015

hUs = USA Inflation rate = 1.0% = 0.01

RFC = short-term yield of Australian government securities = 5% = 0.05

Thus,

RUS - hUs = RFC - hFC

0.015 - 0.010 = 0.05 - hFC

0.005 = 0.05 - hFC

Solve for hFC:

hFC = 0.05 - 0.005

hFC = 0.045 = 4.50%

Inflation rate in Australia = 4.50%

b) What do you estimate the inflation rate to be in Canada, if short-term Canadian government securities yield 8 percent per year?

Use the same formula as in part A.

RUS - hUs = RFC - hFC

Here, RFC = 8% = 0.08

Thus,

0.015 - 0.010 = 0.08 - hFC

0.005 = 0.08 - hFC

Solve for hFC

hFC = 0.08 - 0.005

hFC = 0.075 = 7.50%

Inflation rate in Canada = 7.5%

c) What do you estimate the inflation rate to be in Taiwan, if short-term Taiwanese government securities yield 10 percent per year?

Use the same formula as in part A.

RUS - hUs = RFC - hFC

Here, RFC = 10% = 0.1

Thus,

0.015 - 0.010 = 0.10 - hFC

0.005 = 0.10 - hFC

Solve for hFC

hFC = 0.10 - 0.005

hFC = 0.095 = 9.50%

Inflation rate in Taiwan= 9.5%

8 0
3 years ago
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