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LekaFEV [45]
3 years ago
10

A BBB-rated, $1000 face value, corporate bond has a yield to maturity of 8.2%. A U.S. Treasury security has a yield to maturity

of 6.5%. These yields are quoted as APRs with semiannual compounding. Both bonds pay semiannual coupons at a rate of 7% and have five years to maturity. What is the price (expressed as a percentage of the face value) of the treasury bond?

Business
1 answer:
Shalnov [3]3 years ago
5 0

Answer:

Price of treasury bond in terms of percentage of face value is 102.106%

Explanation:

Given:

Face value (FV) = $1000

Coupon rate = 7% or 3.5% semi-annually

Coupon payment  (PMT) = 1000×0.035 = $35

YTM (rate) = 6.5% or 3.25% semi-annually

Maturity period (nper) = 5×2 = 10 periods

Using PV function to calculate price of treasury bond:

=PV(rate,nper,pmt,FV)

Price of bond is $1021.06 (it is negative as it is a cash outflow)

Price of bond in terms of percentage of face value = \frac{1021.06}{1000} \times100

=102.106%

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Answer:

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3 years ago
MATCH each economist to his economic belief.
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5 0
3 years ago
Read 2 more answers
The following standards for variable manufacturing overhead have been established for a company that makes only one product: Sta
Xelga [282]

Answer:

$13,640 Unfavorable

Explanation:

Data provided

Actual hours = 2,600

Standard hours = 6.0

Standard variable overhead rate = $12.40

The computation of variable overhead efficiency variance is shown below:-

Variable overhead efficiency variance = (Actual hours - Standard hours) × Standard rate

= (2,600 - (250 × 6.0)) × $12.40

= (2,600 - 1,500) × $12.40

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Therefore for computing variable overhead efficiency variance we simply applied the above formula.

7 0
3 years ago
What is required when opening a checking account?
Tcecarenko [31]

Answer:

2 forms of ID & initial  Deposit

Explanation:

so initial deposit

sometimes you need a paycheck but these days not really

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3 years ago
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