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faust18 [17]
3 years ago
9

A 3-year annual coupon bond has coupons of $12 per year starting one year from now and matures in 3 years for the amount $100. T

he yield to maturity is 11.8% (annual effective). Find the Macaulay duration of the bond.
Business
1 answer:
Ganezh [65]3 years ago
4 0

Answer: Macaulay Duration = 2.6908154485 = 2.69

Explanation:

Macaulay Duration = Sum of Cash flows Present Value/ current bond price

Cash flows: year 1 = $12

Cash flows: year 2 = 12

Cash flows: year 3 = 100 + 12 = 112

Sum of Cash Flow PV = (1×12÷ (1.118)^1) + (2×12÷ (1.118)^2) +(3×112÷(1.118)^3)

Sum of Cash Flow PV = 270.37857712

Current Bond Price or Value = Face Value/ (1+r)^n + PV of Annuity

Current Bond Price or Value = 1000/ (1.118)^3 + (30×(1 - (1+0.118)^-3)/0.118

Current Bond Price or Value  = 100.48202201

Macaulay Duration = 270.37857712 ÷ 100.48202201

Macaulay Duration = 2.6908154485 = 2.69

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anzhelika [568]

Answer:

Case 1. $850

Case 2. $2.300

Explanation:

  • Improvement in cottage would cost (250 + 600) = 850. So, increase in GDP is 850.
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8 0
3 years ago
If an air parcel is given a small push upward and it continues to move upward on its own accord, the atmosphere is said to be?
Over [174]

If an air parcel is given a small push upward and it continues to move upward on its own accord, the atmosphere is said to be stable.

If a rising parcel of an air parcel is cooler than the encompassing surroundings it's going to generally tend to sink and returned to its original function. that is due to the fact cool air is extra dense or heavier than hotter air. that is known as stable air. If a rising parcel of air is warmer than the encompassing environment it's going to hold to an upward push.

The relative humidity reaches a hundred percent determined whilst the air parcel temperature cools all the way down to its authentic dew point temperature, similarly lifting and cooling results in internet condensation, forming a cloud at the environmental lapse rate.

Learn more about The air parcel here:-brainly.com/question/14709186

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5 0
2 years ago
What is the 80/20 rule? A very small number of things in your life are going to contribute to something valuable. or A very smal
Airida [17]

A very small number of things in your life are going to contribute to something valuable

5 0
3 years ago
Which of the following encourages consumers to choose a specific brand by offering a​ short-term price​ break?
ololo11 [35]

Answer:

(E). Rebates

Explanation:

A price break is a reduction in price of goods to encourage purchase.

Rebates may be offered in form of a return of a portion of the cash paid, to a customer after purchase has been made, or as a discount on price of goods during purchase.

This is done to encourage consumers to make purchases.

3 0
4 years ago
The following information pertains to Ash Co., which prepares its statement of cash flows using the indirect method: Interest pa
Alborosie

Answer:

$30,000

Explanation:

A supplemental disclosure of cash flow information requires that all the cash paid  in interest during the period must be disclosed.

In Ash's case:

beginning balance interest payable account    $15,000

+ interest expense during the year                    $20,000

<u>- ending balance interest payable account       ($5,000)  </u>

supplemental disclosure =                                  $30,000      

6 0
3 years ago
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