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
butalik [34]
3 years ago
7

Your bond portfolio consists of $30 million worth of Treasury STRIPS with 7 years to maturity, and $10 million of Treasury notes

with a Macaulay duration of 3 years. The term structure is flat, and all spot rates are 3%.
What is the modified (not Macaulay) duration of your portfolio?

a) 3 years
b) 4 years
c) Slightly less than 4 years
d) Slightly greater than 4 years
e) None of these
Business
1 answer:
Verdich [7]3 years ago
5 0

Answer:

<em>d) Slightly greater than 4 years</em>

Explanation:

<em>The portfolio's Macaulay period (MaD) is the mean maturity of its retained earnings.</em>

Fifty per cent of cash flows (in terms of PV) come after three years and another fifty per cent arrive after five years, so the MaD is 0.53 + 0.55 = 4.

We must divide the MaD by (1+ytm/2) to get Modified Duration (MoD).

<em>Then portfolio MoD is </em><u><em>4/(1 + 0.02/2) = 3.96.</em></u>

You might be interested in
PeoplePapers, a greeting cards manufacturing company, has retail stores in most parts of the country. It hires its employees fro
Drupady [299]

OPTIONS:

A. Resources B. reserves. C. overheads. D. variable costs.

Answer:

A. Resources

Explanation:

Resources are factors that aid the production process of any business, which includes land, labor, capital, and management. All are combined together to make production successful. The organization’s processes, the employees and its equipment can be regarded as the company’s resources which are put together in the production of greeting cards for customers use.

8 0
3 years ago
Tommy bought 35 shares of stock at $45.75 per share. He received dividends of $82.45 during the year. At the end of the year, hi
gogolik [260]

Answer:

10.57%

Explanation:

Return on investment is a profitability measure of gains realized from an investment. It is a ratio that shows how a business uses its resources to generate profits. Return on investment compares the net income against the initial investment.

ROI = Net Income / Cost of Investment

For Tommy,

The initial investment is 35 x $45.75 =$1,601.25

The gains from the investments

Dividends of $82.45

Gains in share value = 35 x ($48. 75 -$45.43)

35 x 2.48 =$86.8

Net gains will be $82.45 + $86.8= $169.25

ROI = $169.25/$1601.25

ROI =0.10569  X 100

=10.57%

5 0
3 years ago
In routine jobs where workers have little flexibility, the relationship between job satisfaction and work performance is:
Ira Lisetskai [31]

Answer:

The correct answer is A. Generally small and influenced by other factors

Explanation:

Flexibility in this case refers to the development of more dynamic tasks without taking into account time, and is presented as the way in which employees get on with other tasks in order to learn new things. Job satisfaction is distinguished by aspects of their tasks, where the level of growth is perceived under static working conditions.

3 0
2 years ago
Most resources are nonrenewable, and wants and needs are limited. This is an example of?
dimulka [17.4K]

Answer:

scarcity.

Explanation:

Scarcity can be defined as an economical problem that gives the relationship between non-renewable (limited) resources and the limitless wants and needs of consumers.

Basically, it's very important that producers of goods and services make decisions that would help them on how to efficiently allocate scarce or limited resources, in order to meet the unending requirements, wants and needs of consumers.

In Economics, an example of scarcity is that most of the resources used for the manufacturing of finished goods and services are nonrenewable, and as a result, the wants and needs of the end users or consumers are limited. Thus, economists would advise that economies should decide on what to produce, how to produce, when to produce and for whom to produce due to the finite and limited nature of resources i.e the concept of scarcity.

3 0
2 years ago
You decide to change careers and have assessed your values, interests, and skills. What should you do next?
Tresset [83]

Answer:

Make a list of potential jobs and research them

Explanation:

7 0
3 years ago
Other questions:
  • The major difference between the producer price index and the consumer price index is that the produce price index _____ and the
    8·1 answer
  • Mandesa, Inc. has current liabilities of $9,500,000, current ratio of 2.0 times, inventory turnover of 12 times, average collect
    11·2 answers
  • The possibility that management of the corporation may not be pursuing the same goals as the same goals as those of stockholders
    5·1 answer
  • How does increasing the size of your down payment impact your auto loan?
    5·1 answer
  • On January 1, 2020, Oriole Company had Accounts Receivable $137,400, Notes Receivable $24,000, and Allowance for Doubtful Accoun
    7·1 answer
  • Your company has sales of $ 93,600 this year and cost of goods sold of $ 64,700. You forecast sales to increase to $ 117, 400 ne
    7·1 answer
  • Blake Mycoskie started a shoe business known as TOMS. As a social entrepreneur, Mr. Mycoskie takes the concept of ______________
    14·1 answer
  • Your bank gives you 50 points for monthly online bill pay, 50 points for monthly mobile deposits, 100 points per car payment, an
    5·1 answer
  • Research FedEx's dress code first to find out how the<br> employees dress.
    12·1 answer
  • Bingerton industries began the year with inventory of$85,000. Purchases of inventory on account during the year totaled $310,000
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!