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Colt1911 [192]
2 years ago
14

Which one of these equations applies to a bond that currently has a market price that exceeds par value? C) Market value = Face

value D) Current yield > Coupon rate B) Yield to maturity = Current yield A) Market value < Face value E) Yield to maturity < Coupon rate
Business
1 answer:
seropon [69]2 years ago
7 0

Answer:

E) Yield to maturity < Coupon rate

Explanation:

As we all know that:

Bond's Yield = Coupon Payments  /  Market Price

If the market price has exceeded from the par value then the yield of bond will eventually fall from the previous level. In other words, as market value of bond is directly proportional to the coupon payments so we can say that the coupon rate increases the value of the bond.

Hence

Coupon rate >  Yield to maturity (If the market value is above par value)

If we change the sign, we have:

Yield to maturity < Coupon rate (Which is the option E)

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The risk-free rate is 3%. MCD currently prices at $25. The Delta of a 1-year at-the-money European call on MCD is 0.5. John has
erica [24]

Answer:

Short 1.5 shares

Explanation:

Given data :

Risk free rate = 3%

current price ( market price ) = $25

Delta of  1-year at money European call on MCD = 0.5

<u>Determine how many shares of MCD John should either Long or short to achieve a delta-neutral </u>

use the relation below

4 * 0.5  + 1 ( 0.5 - 1 )  + x = 0

x ( number of shares ) =  - [ 4 * 0.5  + 1 ( 0.5 - 1 ) ]

                                     = - 1.5 shares

negative ( - ) means MCD should short 1.5 shares

5 0
2 years ago
Pascal is a customer-service representative who handles phone inquiries. He has a goal of handling 12 calls per hour. When he ge
Montano1993 [528]

Answer:

A. Ill-conceived goals

Explanation:

Ill-conceived goals refers to setting of goals or incentives in order to promote a desired behavior whereas indirectly encouraging a negative one.

When setting ill-conceived goals, the unintended effects of these goals should duly be taken into consideration.

7 0
2 years ago
Read 2 more answers
A _____ is an instrument issued by a bank, post office, or express company indicating that the payee may request and receive the
Firdavs [7]
The answer is money order because it is an instrument used by a post office, express company and mostly by banks indicating that the payee may request and receive the amount indicated on the instrument or the money order. The money order is a trusted method of a payment than issuing a check because sometimes we get a bouncing check. A money order is a payment order for the amount of money you borrow in the banks or any express company that uses this instrument. And It is required that the funds should be prepaid for the amount shown in it.
5 0
3 years ago
The price system is an important component of the market because it
WINSTONCH [101]

The price system is an important component of the market because it  coordinates the activities of producers, consumers, and owners of resources.

The answer to this question is option c. In economics the price system can simply be described as the way of organizing economic activities.

In order to do this, it coordinates the decisions of the buyers, the suppliers or the producers, and the owners of productive resources.

Read more on brainly.com/question/13497344?referrer=searchResults

6 0
3 years ago
A capital investment project has the following expected incremental values next year: Revenue $1,000,000 Operating costs 200,000
sattari [20]

Based on the calculation below, incremental after-tax operating cash flow is $675,000

<h3>How to calculate incremental after-tax operating cash flow</h3>

This can be calculated as follows:

Profit before interest and tax = Revenue - Operating costs – Depreciation = $1,000,000 - $200,000 - $300,000 = $500,000

Operating income = Profit before tax – (Profit before tax * Tax rate) = $500,000 – ($500,000 * 25%) = $375,000

Therefore, we have:

Incremental after-tax operating cash flow = Operating income + Depreciation = $375,000 + $300,000 = $675,000

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5 0
2 years ago
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