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
Aleks04 [339]
3 years ago
12

A 2-year T-note was issued 9 months ago with a face value of $1000. It pays a 5% per annum coupon, paid semiannually. Suppose th

at the 3-month zero rate is 6%; the 9-month zero rate is 6.1%; the 15-month zero rate is 6.2%; and the 21-month zero rate is 6.3%, where all of these rates are per annum with continuous compounding. What is the price for the bond today
Business
1 answer:
grandymaker [24]3 years ago
7 0

Answer:

The Price of Bond today = $997.07

Explanation:

Semi annual coupons = $1000 * 5% / 2

Semi annual coupons = $25

As 9 months is already over in the two year bond, the coupons are payable

3 months from now, 9 months from now and 15 months from now.

The present value of all these coupons and the principal should be equal to the price of the bond today.  In case of continuous compounding, the formula for Present Value of any future Cash flow C is C*e^(-r*t).

Price of Bond = $25 * e^(-0.06*3/12) + 25*e^(-.061*9/12)+ 1025*e(-0.062*15/12)

Using the value of e as 2.71828

Price of Bond = $25 * 2.71828^(-0.06*3/12) + 25*2.71828^(-.061*9/12)+ 1025*2.71828(-0.062*15/12)

Price of Bond = $ 25 * 2.71828 ^-0.015 + 25*2.71828^-0.04575 + 1025*2.71828^-0.0775

Price of Bond = $ 25 * 1/2.71828^0.015 + 25*1/2.71828^0.04575 + 1025*1/2.71828^0.0775

Price of Bond = $997.07

You might be interested in
What is one reasons why mixed economies exist?
Snowcat [4.5K]

<u>Answer:</u>

<em>Mixed economics places some limits on the safety of society. </em>

<em></em>

<u>Explanation:</u>

As the name infers, a mixed economy is a type of framework where all exercises underway, just as those performed by private and government substances, mix free enterprise with different sorts of regulations. Both the general population and individual parts can work similarly, which implies that financial advancement will be speedier.

This is particularly evident, thinking that financial assets will be used effectively. Additionally, the consumption of assets will be backed off. What's more, the legislature would likewise attempt to build up every division of the population.

3 0
2 years ago
Read 2 more answers
Which of these headlines represents institutional advertising?
yulyashka [42]

Answer:

D

Explanation:

they are promoting their value to the industry and not trying to inform about a specific product. the intent of institutional marketing is to build trust in the brand.

6 0
3 years ago
Read 2 more answers
DONT ANSWER PLZZZZZZZZZ
KIM [24]

Answer:

ok i gochu

Explanation:

5 0
2 years ago
While most of Savvy Inc.'s competitors were moving toward developing and emerging markets, Savvy Inc. decided to keep its operat
Delicious77 [7]

Answer:

The correct answer is: the A option -- time compression diseconomies.

Explanation:

When we talk about time compression diseconomies we refer to the additional costs the company incurred by seeking to quickly reach a given level of an asset stock. That is, when an action increases, rather than decreases, cost and efficiency accumulated more economically over a longer period of time

5 0
2 years ago
According to the video, which of these skills and abilities will help a worker succeed in this career cluster? Check all
Alex73 [517]

Answer:

B, C, E

Explanation:

6 0
3 years ago
Read 2 more answers
Other questions:
  • In a criminal tax case, Darth Vader was charged with several counts of tax evasion and filing a false income tax return, stemmin
    14·1 answer
  • Cass Corporation reported pretax book income of $10,600,000. During the current year, the reserve for bad debts increased by $17
    14·1 answer
  • In accounting What is revenue
    13·2 answers
  • A monopolistic competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed co
    5·1 answer
  • "Tom's Tool Factory is an investment center and is responsible for all of its net income and the use of its assets. This year, t
    13·1 answer
  • Perry Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost infor
    15·1 answer
  • _____ is/are the raw facts and figures businesses collect. Answer Data Information Push technology Warehousing
    9·1 answer
  • We read about making business level strategies and corporate level strategies in pursuit of our vision or mission. In that, comp
    13·1 answer
  • Exercise 4-11 Computing net sales for multiple-step income statement LO P4 A company reports the following sales-related informa
    14·1 answer
  • Listed here are 20 control plans discussed in the chapter. On the blank line to the left of each control plan, insert a P (preve
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!