Select the correct answer.

_____ occurs when the amount of of capital per worker increases

katrin2010 [14]

<span>Gross domestic product </span>occurs when the amount of of capital per worker increases. The answer is letter A

3 0

3 years ago

Workman Software has 8.8 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and cu

OverLord2011 [107]

Answer:

current yield 8.2089552%

YTM = 8.05%

effective annual yield = 4.92%

Explanation:

(A)

current yield = C/P

coupon payment / market price

8.8/107.2 = 0.082089552 = 8.2089552%

(B)

$P = \frac{C}{2} \times\frac{1-(1+YTM/2)^{-2t} }{YTM/2} + \frac{CP}{(1+YTM/2)^{2t}}$

First par being the present value of the coupon payment and second the redeem of the face value at the end of the bond.

market price 107.2

face value 100

time = 19

rate 8.8%

C = annual coupon payment 100 x 8.8% = 8.8

You solve this using a financial calculation and get the semiannual rate

YTM/2 = 0.040268160

then multiply by 2 to get the annual YTM

0.040268160 x 2 =

YTM = 0.08053632 = 8.05%

(C)

Effective Annual Yield

$(1+HPR)^{365/time} -1 = EAY$

where:

Holding period return:

$\frac{Net \: Return}{Investment} = HPR$

In this case:

coupon payment + redem - investment = net return

8.8 * 19 + 100 - 107.2 = 160

160/107.2 = 1.492537313

Then

$(1+HPR)^{365/time} -1 = EAY$

$(1+1.142537313)^{\frac{365}{19\times365}} -1 = EAY$

EAY = 0.049242509 = 4.9242509%

8 0

4 years ago

An investment project provides cash inflows of $705 per year for eight years. a. What is the project payback period if the initi

Yuki888 [10]

Answer: A. 2.05 B. 5.10 C. 0

Explanation: Payback period can be defined as the period under which the profits or savings in an investment can recover the initial outlay invested in that investment. In simple words we can say that it is the time required by an investment to pay for itself.

Pay back period is computed as follows :-

$=\:payback\:period=\frac{\:Initial\:cash\:outlay}{cash\:inflows}$