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
Snowcat [4.5K]
3 years ago
12

Consider a newly issued TIPS bond with a 3-year maturity, par value of $1,000, and coupon rate of 4.00%. Assume annual coupon pa

yments.
Time Inflation in
Year Just Ended Par Value Coupon Payment + Principal Repayment = Total Payment
0 $ 1,000.00
1 2.0% $ 1,020.00 $ 40.80 0 $ 40.80
2 1.0 % $ 1,030.20 $ 41.21 0 $ 41.21
3 3.0 % $ 1,061.11 $ 42.44 $ 1,061.11 $ 1,103.55
What is the nominal rate of return on the TIPS bond in the first year?
a. 3.00%
b. 4.08%
c. 6.08%
d. 6.00%
Business
1 answer:
Ray Of Light [21]3 years ago
8 0

Answer: c. 6.08%

Explanation:

The return for the first year is given as;

= Coupon payment / Par Value

= 40.80/ 1,000

= 4.08%

TIPS are inflation protected securities so this return is the real return. Nominal return is;

= Real return + inflation

= 4.08% + 2.0%

= 6.08%

You might be interested in
Under U.S. GAAP, if the carrying value of a fixed asset was $50,000, the undiscounted expected future cash flows was $55,000, th
ira [324]

Answer:

$0

Explanation:

According to US GAAP the reduction in the value of the asset due to a decrease in the fair value. It means when fair value of the asset is reduced than the book value of the asset.

Amortized Cost / Book value = $50,000

Market Value = $53,000

Discounted Value = $51,000

There is no Impairment loss on this asset as the fair market value is more than the book value of the asset.

7 0
3 years ago
Read 2 more answers
On January 1, a machine with a useful life of five years and a residual value of $5,000 was purchased for $25,000. What is the d
emmasim [6.3K]

Answer:

c. $4,000

Explanation:

The computation of the depreciation expense for year 2 under straight-line method is shown below:

= (Original cost - residual value) ÷ (useful life)

= ($25,000 - $5,000) ÷ (5 years)

= ($20,000) ÷ (5 years)  

= $4,000

In this method, the depreciation is same for all the remaining useful life i.e $4,000 is charged for remaining three years

7 0
3 years ago
In​ 2008, as a financial crisis began to unfold in the United​ States, the FDIC raised the limit on insured losses to bank depos
Tomtit [17]

The FDIC stands for Federal Deposit Insurance Company.

By raising the limit on insured losses the FDIC helps stabilize the system by instilling confidence.

If the consumer knows that their savings accounts are protected up to $250,000 they will be encouraged to spend money during a time of crisis.

Because of the increased limit, there is less probability that there would be something called

"a run on the bank."

8 0
3 years ago
When creating a data backup plan or policy, what five basic questions should be answered?
Tresset [83]
Each establishment, whether small or big, government-owned or private companies, always have to backup their files in case of emergencies. As you make your backup plan, you must come across these five basic key questions:

1. Are you backing up all your data? You have to sort your files to be backed up because storage can be limited.

2. How often is your data backed up? You must make sure to back up your data on a regular basis, if not day-to-day.

3. Who is responsible for your backups? For big companies, it is too big of a task for one person to shoulder. Usually, this is tackled by a department, usually the I.T. Department.

4. Do your backups actually work? You should test regularly if these back ups actually work by restoring data files every now and then.

5. Do you have right backup checks and balances in place? The I.T Department tackling backup plans is one thing. But there should also be checks and balances so that you have a backup of your backup. It's better to be safe than sorry.
6 0
3 years ago
Benchmarking involvesA. comparing how different companies perform various value chain activities and then making cross-company c
Vinvika [58]

Answer:

Letter A is correct. <u>Comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs of these activities.</u>

Explanation:

The most suitable alternative to this question is letter A, because the definition Benchmarking can be defined <u>as the process and search for in-depth knowledge about your competitors and the way they carry out their activities. </u>

It consists of investigating competitors in order to compare operations, products and services between a company and its main competitors. Through the research of competitors it is possible to better understand the market and adapt the best practices to be successful, in addition to achieving continuous improvement of processes, in addition to reducing errors and costs through the analysis and knowledge of the actions of competing companies.

3 0
3 years ago
Other questions:
  • To make a profit while benefiting humanity" is an example of a mission statement that A. incorporates values. B. is too vague. C
    6·1 answer
  • How much money has to be invested at 5.1% interest compounded continuously to have $17,000 after 14 years?
    5·1 answer
  • Suppose a state passes a minimum wage law that increases the minimum wage from $5/hour to $20/hour. The equilibrium wage prior t
    14·1 answer
  • Carly is a manager at a business. when she has a job opening, she regularly does internet searches on the applicants to see if t
    14·1 answer
  • President of the United States promises to produce more defense goods without any decreases in the production of other goods. Th
    5·1 answer
  • How can the 3d rendering service helps you to win the architecture competition?
    13·1 answer
  • After a retiring from a successful business​ career, you would like to make a donation to your university. This donation will go
    9·1 answer
  • Misu Sheet, owner of the Bedspread Shop, knows his customers will pay no more than $110 for a comforter. Misu Sheet wants to adv
    15·1 answer
  • A util is an artificial construct used as a means of measuring the A. costs of producing a good B. price of a good C. satisfacti
    11·1 answer
  • Identify what is needed to calculate the P/E ratio. (Check all that apply.) Multiple select question. Return on equity Average s
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!