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Vanyuwa [196]
3 years ago
5

Calculate the price of a 5.2 % coupon bond with 18 years left to maturity and a market interest rate of 4.6 %.(Assume interest p

ayments are semiannual.)
Do not round intermediate calculations and round your final answer to 2 decimal places
Is this a discount or premium bond?​
Business
1 answer:
cupoosta [38]3 years ago
7 0

Answer:

Bond is selling at Premium

Explanation:

It is common for bond valuation if coupon rate is greater than market interest rate than bond is selling at premium.

Suppose

Bond = $1000

Coupon rate = 5.2% / 2 = 2.6%

Market interest rate = 4.6% / 2 = 2.3%

No of year = 18 x 2 = 36 Years

using PVIFA and PVIF table value coupon amount and bond we can get the value of current market price.

Coupon is $1000 x 2.6% = $26

Par Value of bond = $1000

Using PVIFA & PVIF table at 2.3% we get the following figures.

$ 26 x 24.3026 = $631.87

$ 1000 x 0.4410 = $441.04

Current market value of bond = $1072.91

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Explain effective demand in your<br> own words ​
mestny [16]

Explanation:

Effective demand refers to a situation in which equilibrium output is determined solely by the level of aggregate demand. This is because of the assumption that supply is perfectly elastic. If there exists any difference between AD and AS, the equilibrium output will be determined only by AD.

6 0
2 years ago
During 2018, Skechers USA had Sales of $1,846.4, Gross profit of $818.8 million and Selling, General and Administration expenses
sveta [45]

Answer:

The answer is $1,027.6 million

Explanation:

Gross profit = Sales - Cost of Sales(cost of goods sold)

Gross profit = $818.8 million

Sales of $1,846.4 million.

To find Cost of Sales, we rearrange the formula to now be:

Sales - Gross profit

$1,846.4 million - $818.8 million

=$1,027.6 million

Therefore, Skechers' Cost of sales for 2018 is $1,027.6 million

4 0
3 years ago
State any five reasons why an entrepreneur may carryout Market survey.​
swat32

Answer:

to know what the other people are interested in, for example they do a survey to see how much of each product they need and the popularity of how many people like the stuff, those are 2 reasons, quantity and I would say popularity 3: get the people to know that enreprenuer cares 4 and five just think about it, I cant really think of anymore

Explanation:

6 0
3 years ago
Read 2 more answers
Distributors have grown in their value and influence in the economy for the following reasons: 1) the rise in e-commerce has inc
Margarita [4]

Answer:

Businesses have preferred their marketing strategy for B2B to be concise and to the point because businesses do not need persuasion like customers.

Explanation:

A company might choose B2B or B2C strategy depending on the their business strategy. It is easier for a business to opt for B2B marketing as the expense may be lower and there do not need persuasion for selling the product. The B2C is a tough marketing strategy as preference of different customers need to be kept in view.

3 0
3 years ago
Assume that you manage a $10.00 million mutual fund that has a beta of 1.05 and a 9.50% required return. The risk-free rate is 4
nignag [31]

Answer:

The required rate of return of Portfolio is 8.83%

Explanation:

First we need to find the risk Premium of Existing Portfolio using the CAPM model.

Required rate of return = RF + ( Rm - RF ) x Beta

9.50% = 4.20% + ( Rm - RF ) x 1.05

9.50% - 4.20% = ( Rm - RF ) x 1.05

5.30% = (Rm - RF) x 1.05

(Rm - RF) = 5.30%/1.05

(Rm - Rf) = 5.05%

Second we need to find the New Portfolio Beta Using the Following step

Portfolio Beta = ( Existing Portfolio / Total Investment ) x Beta + ( New stock / Total Investment ) x Beta

Portfolio Beta = (10M / 15M) x 1.05 + (5M/15M) x 0.65 = 0.9167

Third Step we will use the CAPM model again to get Required Rate of Return of New Portfolio.

Required rate of return = RF + ( Rm - RF ) x Beta

Required rate of return = 4.20% + 5.05% x 0.9167

Required Rate of Return = 8.83%

5 0
3 years ago
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