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kondor19780726 [428]
3 years ago
11

A portfolio manager is considering the purchase of a bond with a 5.5% coupon rate that pays interest annually and matures in thr

ee years. If the required rate of return on the bond is 5%, the price of the bond per 100 of par value is closest to:
Business
1 answer:
dmitriy555 [2]3 years ago
7 0

Answer:

The price of the bond is closest  $101.36  

Explanation:

It is noteworthy that a rational investor pays for a bond today the cash flows derivable from the bonds in future discounted to today's terms.

The future cash flows comprise of the yearly coupon interest of $5.5(5.5% *$100) for 3 years as well as the repayment of the principal $100 at the end of year 3.

To bring the cash inflows today's term, we multiply them  them by the discounting factor 1/(1+r)^N , where is the yield to maturity of 5% and N is the relevant the cash flow is received.

The discounting is done in attached spreadsheet leading $ 101.36  present value today.

Download xlsx
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In classical conditioning, the ns becomes a ________ after it reliably signals the occurrence of the ________.
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In classical conditioning, the Neutral Stimulus (NS) becomes a Conditioned Stimulus (CS) after it reliably signals the impending occurrence of the Unconditioned Stimulus (US).

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2 years ago
The standard format rules for a professional letter should be followed. <br><br><br> True or false.
Luda [366]

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True.

Explanation:

To write a professional letter, some standard format rules need to be followed.

It is necessary that the letter is written using a formal vocabulary, with clear and precise information, in the appropriate format, containing date, information about your professional profile, about the company and a final greeting.

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On November 1, Alan Company signed a 120-day, 10% note payable, with a face value of $45,000. Alan made the appropriate year-end
shepuryov [24]

Answer:

Debit Notes Payable $45,000; debit Interest Payable $750; debit Interest Expense $750; credit Cash $46,500

Explanation:

The journal entry is given below:

Notes payable $45,000  

Interest payable ($45,000 × 10% × 60 ÷ 360) $750  

Interest expense ($45,000 × 10% × 60 ÷ 360) $750  

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here note payable, interest payable, interest expense is debited as it increased the expenses and decreased the liabilities while on the other hand the cash is credited as it decreased the assets

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