Answer:
Arbitrage opportunity may exists as the ZCBs selling at different price at same time due to change in their YTM .
The PV of 100 face value zcb with different ytm are different , in this case.
for one year maturity with face value 100 current price = fv/ pv at 8% = 92.59
for Two year maturity with face value 100 current price = fv / Pv at 9% for two years = 84.167 , if the bond holder sell the bond after 1 year only, the price = 91.74 .
a) The arbitrage opportunity exist with buy two bond with face value 100 with maturity of 1 year and face value 110 with maturity of 2 years.
b) profit 0.01 , as difference between PV of both bond at their YTM rate.
Answer:
B. the demand for a product and its price has a direct relationship
Explanation:
demand comes from the price which ultimately effects the proportions with the consumers purchasing the product. if the product is good enough with a fair price to come with it, the demand will increase, or if a product becomes more scarce the demand for it will increase along with the price raising.
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Answer:
The required return is 7.92%
Explanation:
Required return is defined as the minimum return which the investor expects to accomplish through investing in the project.
The required return would be computed as:
Required return = Dividend paid each year / Selling price per share
where
Dividend paid each year is $6,40
Selling price per share amounts to 480.80 per share
Putting the values above:
Required return = $6.40 / $80.80
Required return = 7.92%
Answer:
The volume of water needed=0.86 liters
Explanation:
Step 1: Form an equation
The equation can be expressed as follows;
(Ac×Va)+(Wc+Vw)=Fc(Va+Vw)
where;
Ac=initial concentration of antifreeze
Va=volume of antifreeze in liters
Wc=concentration of water
Vw=volume of the water in liters
Fc=final concentration of the antifreeze
This expression can be written as;
(concentration of antifreeze×volume of antifreeze in liters)+(concentration of water×volume of the water)=final concentration of the antifreeze(volume of antifreeze in liters+volume of the water in liters)
In our case;
Ac=45%=45/100=0.45
Va=3 liters
Wc=0
Vw=unknown
Fc=35%=35/100=0.35
Replacing;
(0.45×3)+(0×Vw)=0.35(3+Vw)
1.35=1.05+0.35 Vw
0.35 Vw=1.35-1.05
0.35 Vw=0.30
Vw=0.3/0.35=0.86
Vw=0.86 liters
The volume of water needed=0.86 liters
