Answer:
a) YTM = 9.8%
b) realized compound yield is 9.9%
Explanation:
a) PMT = 80
par value FV = 1000
coupon rate = 8%
curent price PV = 953.1
years to maturity n = 3
Yield to maturity (YTM) = = = 9.8%
b) r2 = 10% = 100%+10%=1.1
r3 = 12% = 100%+12%=1.12
Realized compound yield:First, find the future value (FV. of reinvested coupons and principal
FV = ($80 *1.10 *1.12) + ($80 * 1.12) + $1080 = $1268.16
let a be the rate that makes the future value $1268.16
953.1(1+y)³ =$1268.16
(1+y)³=1.33
1+y=1.099
y = 0.099 = 9.9%
Answer:
Real rate of return= 13.7%
Explanation:
<em>The return on investment is the sum of the dividends earned and capital gains made during the holding period of the investment.
</em>
<em>Dividend is the proportion of the profit made by a company which is paid to shareholders. </em>
<em>Capital gains is another type of the return made on an equity investment as a result of increase in the value of the shares. It is difference between the cost of the share and the value at the time of disposal.
</em>
<em>Therefore, we can can compute the return on the investment as follows:
</em>
The total return = (2.90) + (65.60-60)= 8.5
To determine the real return, we adjust the nominal return for the impact of inflation as follows:
Real total return ($) = 8.5/1.034=8.220
Total return in (%) = (8.220
/60)× 100= 13.7%
Answer:
variable costs; diminishing marginal returns
fixed costs; do not change
Explanation:
Variable costs are costs that changes with the level of output. If output increases, variable cost increases and if output falls,it falls. Examples of variable costs are wages, cost of production materials etc.
Fixed cost don't vary with production. Example rent.
They do not increase or decrease with production.
I hope my answer helps you
Answer:
Economic activity refers to a human activity related to production and consumption of goods and services for economic gain. Non-economic activity is an activity performed gladly, with the aim of providing services to others without any regard to monetary gain. Economic, i.e. to earn money.
Explanation:
Answer:
Value added
Explanation:
Value-added - it is the total difference that comes out between the product value in the market and the cost of producing that product. cost of a product is based on the survey which gives the idea that how much cost may be assigned to the product.
The value of this difference help to determine the profit on products.
Higher the value of add, higher will be the charges of product and higher will be the revenue collected.