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RideAnS [48]
2 years ago
8

Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000 at a yield to maturity of 6.2%. Now, with 6 yea

rs left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has increased to 15%. What is the price of the bond now
Business
1 answer:
lyudmila [28]2 years ago
8 0

Answer:

The price of the bond is $659.64.

Explanation:

C = coupon payment = $62.00 (Par Value * Coupon Rate)

n = number of years = 6

i = market rate, or required yield = 15 = 0.15  = 0.15 /2  = 0.075

k = number of coupon payments in 1 year = 2

P = value at maturity, or par value = $1000

BOND PRICE= C/k [ 1 - ( 1 / ( 1 + i )^nk ) / i ] + [ P / ( 1 + i )^nk )]

BOND PRICE= 62/2 [ 1 - ( 1 / ( 1 + 0.075 )^6x2 ) / 0.075 ] + [ $1,000 / ( 1 + 0.075 )^6x2 )]

BOND PRICE= 31 [ 1 - ( 1 / ( 1.075 )^12 ) / 0.075 ] + [ $1,000 / ( 1.075 )^12 )]

BOND PRICE= 31 [ 1 - ( 1 / ( 1.075 )^12 ) / 0.075 ] + [ $1,000 / ( 1.075 )^12 )]

BOND PRICE= $239.79 + $419.85 = $659.64

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Mercedes-Benz has a self-driving car capable of 80 miles-per-hour speed. You have to keep your hands on the wheel in this E-clas
Ket [755]

Answer:

I would use survey research to determine the general opinion, positive or negative, on the feature from the general public.  

Explanation:

When conducting any survey research, it is important to sample a wide variety of people. In this case, you would want to survey the general population, not just former Mercedes customers.  

I would design a focus group survey with a series of questions where participants can choose from a range, 0-5, on how much they agree with a certain statement.

At the beginning of the survey, participants would read a brief paragraph explaining the features on the new car before continuing to the part where they record their responses.

Once the survey is conducted, the data can be analyzed. If the majority, say 70%, of all people surveyed agree strongly that a self driving car is a good idea and that the world is ready then you can assume that the general population is in fact ready.

7 0
3 years ago
To pay for college, Henry received the following: $1,000 scholarship from the Thespian Club to pay for books $4,000 scholarship
Alika [10]

Answer:

$5,000

Explanation:

Money received as scholarship and used to pay for tuition or related expenses is not included in the gross income. So the $1,000 scholarship from the Thespian Club and the $4,000 scholarship from the Elks Lodge are not taxable. The only taxable income that Henry earned is the $5,000 that he was paid for being a dorm supervisor.

6 0
3 years ago
You own a stock that has an expected return of 15.72 percent and a beta of 1.33. The U.S. Treasury bill is yielding 3.82 percent
ryzh [129]

Answer: expected rate of return on the market=12.77%

Explanation:

Given that

Expected return =15.72 percent

beta =1.33

Risk free rate=3.82 percent

According to the CAPM FORMULA,

Expected return = Risk free rate+ Beta( expected rate of return on market - Risk free rate

15.72% = 3.82 % + 1.33 ( Em - 3.82%)

0.1572=0.0382+ 1.33 Em - 0.050806

0.1572- 0.0382+ 0.050806 = 1.33 Em

0.169806=1.33Em

Em = 0.169806/1.33

=0.12767 x 100

12.767 ≈12.77%

expected rate of return on the market=12.77%

4 0
2 years ago
A commercial bank holds $500,000 in checkable deposits liabilities and $120,000 in reserves. If the required reserve ratio is 20
scZoUnD [109]

Answer: E.) Amount created by Single Bank $20,000 and Amount Created by Banking System $100,000

Explanation:

The required reserve ratio = 20%

Checkable deposit liabilities = $500,000

Reserve = $120,000

The required reserve refers to a designated percentage of a commercial bank's deposit which is the minimum that must be held by a commercial bank. Regulation is usuay pronounced by the central bank of the nation.

Banking system loan increase :

Reserve ratio × Checkable deposit liabilities

20% × $500,000 = 100,000

Commercial bank maximum

Reserve amount - required reserve amount

$120,000 - (0.2 × 500,000)

$120,000 - $100,000 = $20,000

7 0
3 years ago
Describe a real or made up but realistic example of a rational consumer motive that you or someone you know has experienced. Wha
MArishka [77]
For example , motive could be simply because of necessity

Let's say that i want to be a programmer in the future, but i have no computer. I believe that buying one computer product would be a necessary thing to do to achieve my dream so i used my saved money to buy it

hope this helps
3 0
3 years ago
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