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Semmy [17]
3 years ago
15

A bond with a $1,000 face value and an 8 percent annual coupon pays interest semiannually. The bond will mature in 15 years. The

nominal yield to maturity is 11 percent. What is the price of the bond today?
Business
1 answer:
Nimfa-mama [501]3 years ago
4 0

Answer:

The price of the bond today is $784.27

Explanation:

Face value (FV): $1000

Coupon rate: 8% -> counpon received annually (PMT) is $80 (= $1000 * 8%)

Tenor: 15 years

YTM: 11%

Present value = Future Value/ (1+ YTM)^tenor

We can use excel to calculate Present Value of annual payment = PV(Rate,tenor,-PMT) = PV(11%,15,-80) = $575.27

The price of bond today = present value of face value + present value of coupon received annually

= 1000/(1+11%)^15+ 80/(1+11%)^15 + 80/(1+11%)^14+.... +80/(1+11%)^1

= 1000/(1+11%)^15 + $575.27

= $784.27

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Hilary is a retired teacher who lives in Miami and does some consulting work for extra cash. At a wage of $50 per hour, she is w
Basile [38]

Answer:

Hilary is a retired teacher who lives in Miami and does some consulting work for extra cash. At a wage of $50 per hour, she is willing to work 10 hours per week. At $65 per hour, she is willing to work 19 hours per week.

Using the midpoint method, the elasticity of Hilary’s labor supply between the wages of $50 and $65 per hour is approximately 2.37 , which means that Hilary’s supply of labor over this wage range is elastic.

Explanation:

Midpoint elasticity = (Change in labor supplied / Average labor supplied) / (Change in wage rate / Average wage rate)

= [(19 - 10) / (19 + 10) / 2] / [$(65 - 50) / $(65 + 50) / 2]

= [9 / (29 / 2)] / [15 / (115 / 2)]

= (9 / 14.5) / (15 / 57.5)

= 0.62/0.26

Midpoint elasticity = 2.37

Once elasticity is greater than 1, supply of labor is Elastic.

5 0
3 years ago
Roth Service Co. experienced the following transactions for 2018, its first year of operations: Provided $82,000 of services on
frosja888 [35]

please find the attached for the answer

Download docx
5 0
2 years ago
You currently have $5,400. First United Bank will pay you an annual interest rate of 8.9, while Second National Bank will pay yo
IRISSAK [1]

Answer:

Second National  Bank

Present value (PV) = $5,400

Future value (FV) = $13,900

Interest rate (r) = 10% = 0.10

FV = PV(1 + r)n

$13,900 = $5,400(1 + 0.10)n    

<u>$13,900</u> = (1.10)n

$5,400            

2.574074074 = (1.10)n

Log 2.574074074 = n  log 1.10

<u>Log 2.574074074</u> = n  

Log 1.10                  

n =  9.9 years      

None of the answers is correct                                                                                                                                                          

Explanation:

In this case, we will apply the formula of future value of a lump sum. The present value, interest rate and future value were provided with  the exception of number of years. Thus, the number of years becomes the subject of the formula. The future value equals present value, multiplied                     by 1 plus interest rate, raised to power number of years.                                                                                                                                                                                                        

8 0
3 years ago
How to access your federal reserve account?
asambeis [7]
The federal reserve account is the central bank of the United States of America. It is an independent bank in a sense that it does not need the approval of the President or any government authority to forego with their daily transactions. Only institutions have accounts in the federal reserves like commercial banks. An individual cannot access one.
4 0
3 years ago
20. Which of the following is correct? a) A company’s book value reflects the company’s history of equity investment and retaine
diamong [38]

Answer:

a. A company's book value reflects the company's history of equity investment and retained earnings; a company's market value reflects investor's view of the company's future earning prospects.

Explanation:

The book value of a company is the residual equity and retained earnings after all liabilities paid. Market value is the view of investor's about the company and is what the company would be worth if it were to be sold.

7 0
3 years ago
Read 2 more answers
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