Amy purchased a five-year $5,250 bond below par value for $4,675 with a coupon of 3.5%. What was her yield?
1 answer:
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Answer:
m = -1
b = 5
Step-by-step explanation:
Hello!
Slope - Intercept Form:
- m = slope
- b = y-intercept
The slope of the line is the rate of change, or how the graph changes in y as it changes in x.
Slope can be calculated by the formula:
We need two points on the line to get the x and y-values. I'm going to choose points (0,5) and (4,-3).
Calculate Slope
The slope is -2.
<h3>Y-intercept</h3>The y-intercept of the line is where the graph touches the y-axis (x = 0). It can be found by looking at the intersection of the graph and the axis.
The intersection happens at point (0,5), so the y-intercept is 5.
<h3>Equation</h3>We found m, the slope, to be -2 and b, the y-intercept, to be 5. We can just plug it into the equation format.
Equation:
Answer:
z=1.59
If we compare the p value and the significance level given we see that
so we can conclude that we fail to reject the null hypothesis, so we can conclude that the mean repellency of the new bug repellent is greater than 89% at 0.025 of signficance.
Step-by-step explanation:
1) Data given and notation
represent the mean effectiveness of a new bug repellent for the sample
represent the population standard deviation for the sample
sample size
represent the value that we want to test
represent the significance level for the hypothesis test.
t would represent the statistic (variable of interest)
represent the p value for the test (variable of interest)
State the null and alternative hypotheses.
We need to conduct a hypothesis in order to determine if the mean repellency of the new bug repellent is greater than 89% or 0.89, the system of hypothesis would be:
Null hypothesis:
Alternative hypothesis:
We don't know the population deviation, and the sample size <30, so for this case is better apply a t test to compare the actual mean to the reference value, and the statistic is given by:
(1)
t-test: "Is used to compare group means. Is one of the most common tests and is used to determine if the mean is (higher, less or not equal) to an specified value".
Calculate the statistic
We can replace in formula (1) the info given like this:
Calculate the P-value
First we need to calculate the degrees of freedom given by:
Since is a one-side upper test the p value would be:
In Excel we can use the following formula to find the p value "=1-T.DIST(1.59;17;TRUE)"
Conclusion
If we compare the p value and the significance level given we see that
so we can conclude that we fail to reject the null hypothesis, so we can conclude that the mean repellency of the new bug repellent is greater than 89% at 0.025 of signficance.
