1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
wel
3 years ago
8

Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par value bonds have a quoted annual interest ra

te of 10 percent and the interest is paid semiannually. The yield to maturity on the bonds is 14 percent annual interest. There are 10 years to maturity.
Required:

Compute the price of the bonds based on semiannual analysis.
Business
1 answer:
Mrrafil [7]3 years ago
3 0

Answer:

The answer is $788.12

Explanation:

Price of the bond is what the issuer will pay for the bond

The payment is semiannual.

Number of years (N) - 20 periods (10 years x 2)

Yield-to-maturity(YTM) - 7%( 14% ÷ 2)

Present Value(price of bond) = ?

Future Value(FV) = $1,000

Payment Coupon(PMT) = $50[(10% x $1000) ÷ 2]

Using a Financial calculator, price of the bond on semiannual basis is

$788.12

You might be interested in
The Federal Reserve (or Fed) often executes its policy by selling or buying U.S. government securities in the open market, which
dem82 [27]

Answer:

a) When interest rates on U.S. government securities increases, then the Federal Reserve sells those securities in the open market in order to decrease the money supply. This is contractionary monetary policy of the Federal Reserve. As interest rates are indirectly affected by open market operations, the Federal Reserve sells securities on the open market to reduce the amount of money in circulation to combat rising inflation in the economy.

(b) The federal funds rate, the interest rates charged on the loans to individuals and firms and the rates of bank deposits will increase. As a result, the demand for bank deposits will increase and the demand for other debt securities will decrease. This in turn will increase the yield offered on these instruments.

4 0
3 years ago
Suppose you find $20. if you choose to use the $20 to go to the football game, your opportunity cost of going to the game is:___
alukav5142 [94]

Suppose you find $20. if you choose to use the $20 to go to the football game, your opportunity cost of going to the game is <u>$20</u>.

The opportunity cost is time spent analyzing and that money to spend on something else. A farmer chooses to plant wheat; the opportunity fee is planting a specific crop or alternate use of the assets (land and farm machine).

Opportunity value is a financial term that refers back to the cost of what you need to give up so that it will choose something else. In a nutshell, it is a price of the road not taken.

Whilst economists talk to the “opportunity cost” of a useful resource, they imply the fee of the following-maximum-valued opportunity use of that aid. If, for an instance, you spend time and money going to a film, you cannot spend that point at domestic analyzing an ebook, and also you cannot spend the cash on something else.

Learn more about opportunity costs here: brainly.com/question/481029

#SPJ4

6 0
1 year ago
Which of the following is a true statement about a request for a change in accounting method?A. Some requests are automatically
fiasKO [112]

Answer: (E) All of these options are true

Explanation:

  The change in the accounting method is the process of changing the overall plan of the accounting in terms of gross income and the cash deduction. It is also change the material item in terms of treatment.

 The form 3115 is one of the application that required in the accounting method. This application is filed with the proper request to the IRS to change the accounting method. The IRS basically provide the automatic procedure for obtain the automatic consent for changing the method.

Therefore, Option (E) is correct.

 

6 0
3 years ago
For daily work production, several examiners can work together in a large open area, as long as they all have ________ level of
Tanzania [10]

Answer:

the same

Explanation:

When examiners in a large open area have the same level of authority and access, work production gives room for more efficeincy and increased production. This means that everyone is on the same level and can do everything needed without awaiting authorization and clearance which could slow down production.

Cheers.

3 0
3 years ago
You invested $4,500 in a project which gave you a return of 12.5% the 1st year. You were quite happy, but the 2nd year wasn't as
Furkat [3]

Answer:

4.9%

Explanation:

The computation of the annual average rate of return over the three years is shown below:

Given that

Positive return in 1st year is 12.5%

The Negative return in 2nd year is 3.3%

And, the positive return in 3rd year is 5.5%

So, the annual average rate of return is

= (12.5% - 3.3% + 5.5%) ÷ (3 years)

= 4.9%

4 0
3 years ago
Other questions:
  • "Our teams in different countries have learned a great deal, and I am putting together an international team to study and share
    14·1 answer
  • Miller is the owner of a restaurant that has several franchises. One of the franchisees owes Miller a sum of $18,000 for the goo
    9·1 answer
  • The type of account and normal balance of unearned consulting fees is revenue, credit liability, credit liability, debit expense
    12·1 answer
  • Ben owns a lawn care business. from experience, ben has found that john deere equipment lasts almost twice as long as competitor
    12·1 answer
  • Swifty Corporation had net sales of $2,419,200 and interest revenue of $39,300 during 2020. Expenses for 2020 were cost of goods
    12·1 answer
  • What is the last step in creating a distribution plan?
    15·1 answer
  • Which of the below factor into the price of a company's stock?
    10·1 answer
  • Suppose that there is only one provider of a service in a state. Because this provider experiences economies of scale, the gover
    5·1 answer
  • Meyer &amp; Smith is a full-service technology company. They provide equipment, installation services as well as training. Custo
    9·1 answer
  • A franchisee pays a sum of money to a franchisor called a _____ for the right to open a franchise.
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!