Answer:
(a) The arbitrage strategy is to buy zeros with face values of $140 and $1,140 and respective maturities of one and two years, and simultaneously sell the coupon bond.
(b) The profit on the activity equals $0.72 on each bond.
Explanation:
The price of the coupon bond = 140 × PV(7.9%, 2) + 1000 × PV(7.9%, 2)
= 140 × (1-(1/1.079)^2)/0.079 + 1,000/1.079^2
= $1,108.93
If the coupons were withdrawn and sold as zeros individually, then the coupon payments could be sold separately on the basis of the zero maturity yield for maturities of one and two years.
[140/1.07] + [1,140/1.08^2] = $1,108.21.
The arbitrage strategy is to buy zeros with face values of $140 and $1,140 and respective maturities of one and two years, and simultaneously sell the coupon bond.
The profit on the activity equals $0.72 on each bond.
The choices were <span>A. A profit center. B. A cost center. C. A revenue center.
D. An investment center.
The answer is B. a cost center.
Cost centers give profit to a company indirectly. It can come from human resources, the right people for the job are hired makes efficient work done carefully. Research and development is also a cost center because it can search for productive works and innovations that can help the company address its weaknesses. R&D can lower the budget cost and still maintain the quality of products. </span>
Answer:
Medium of exchange
Explanation:
Fresh fish is not an effective form of money. Fresh fish lacks medium of exchange, which makes it ineffective.
Answer:
a) $34 billion.
Explanation:
Total Expenditure=Y=C+I+G+NX
= 20+2+7+5
= 34
D the lower the taxes(I searched it up)
