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
adell [148]
3 years ago
9

There are zero coupon bonds outstanding that have a YTM of 5.97 percent and mature in 19 years. The bonds have a par value of $1

0,000. If we assume semiannual compounding, what is the price of the bonds
Business
1 answer:
Fed [463]3 years ago
8 0

Answer:

market price = $1,104.20

Explanation:

yield to maturity of zero coupon bonds = (face value / market price)¹/ⁿ - 1

  • YTM = 5.97%
  • n = 19 x 2 = 38
  • face value = $10,000

(face value / market price)¹/ⁿ = YTM + 1

face value / market price = (YTM + 1)ⁿ

market price = face value / (YTM + 1)ⁿ

market price = $10,000 / 1.0597³⁸ = $10,000 / 9.0563 = $1,104.20

You might be interested in
Scenario 17-5. assume that a local restaurant sells two items, salads and steaks. the restaurant's only two customers on a parti
rodikova [14]

Answer: The price of the tied good is $20.

Explanation: The practice of tying is used to package products in such a way that the price of the tied (combined) good is closer to the buyers total willingness to pay for the two goods.

In this case, the total willingness to pay of Carnivore is $20+$7=$27

While, that of Leafygreens is $8+$12=$20

Thus, the producer will sell the combined good at $20 as it this price both the consumers will buy the tied good. If the producer sells it at $27, then only the Carnivore will buy the good but Leafygreens will not.

Thus, with zero marginal cost of serving additional consumer it is better for the producer to sell at $20.

8 0
4 years ago
A company has five plants p1, p2, p3, p4 and p5.​it now wabts to intorduce
11Alexandr11 [23.1K]
What’s the question??
5 0
3 years ago
On the global grid the prime meridian is at ____. (1 point)
jok3333 [9.3K]
0 degrees longitude
4 0
3 years ago
The one-year forward rate of the British pound is quoted at $1.60, and the spot rate of the British pound is quoted at $1.63. Is
mihalych1998 [28]

Answer:

discount; 1.8%

Explanation:

Calculation for the forward rate using this formula

forward rate=(F/S) - 1

Let plug in the formula

forward rate= ($1.60/$1.63) - 1

forward rate= -1.8 percent.

Therefore The forward DISCOUNT is 1.8 percent.

7 0
3 years ago
on august 1, paid $72,000 cash to purchase houtte's 9%, six-month debt securities ($72,000 principal), dated august 1.
Kitty [74]

Here short term investment is debited as it increased the asset and credited the cash as decreased the asset.

here cash is debited as it increased the asset and credited the interest revenue as it also increased the revenue.

What Are Short-Term Investments?

  • Marketable securities, commonly referred to as temporary investments or short-term investments, are financial investments that can be quickly converted to cash, usually within five years.
  • After only three to twelve months, many short-term investments are sold or turned into cash. CDs, money market accounts, high-yield savings accounts, government bonds, and Treasury bills are a few typical examples of short-term investments.
  • Short-term investments, also known as marketable securities or temporary investments, are financial investments that can be easily converted to cash, typically within 5 years.
  • Typically, these investments are high-quality and highly liquid assets or investment vehicles.
  • Short-term investments may also specifically refer to financial assets of a similar kind, but with a few additional requirements, that are owned by a company.

To know more about Short-term investment visit:

6 0
2 years ago
Other questions:
  • The minimum possible short run average cost are equal to long run average cost when
    15·1 answer
  • A friend asks you to invest $500 at 5 percent interest in her business. you want to invest but are concerned because your friend
    9·2 answers
  • Describe the six buyer-readiness stages along with the marketing strategies used at each stage.
    13·1 answer
  • Assume that Delaware Ice Cream Company uses the FIFO method to calculate equivalent units. It has unit costs of $10 for material
    14·1 answer
  • The following information applies to the questions displayed below.
    10·1 answer
  • One country refuses to sell goods to its neighboring country based on the belief that the neighboring country harbors radicals a
    9·1 answer
  • Select the correct revenue recognition principle for each of the following. Clear All Recognize revenue over the passage of time
    8·1 answer
  • For 2021, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company reported accounts receivable and an a
    12·1 answer
  • Cyclical unemployment arises when:______.
    8·1 answer
  • The tax multiplier equals the change in​ ________ divided by the change in​ ________.
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!