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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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Ryngaert Inc. recently issued noncallable bonds that mature in 15 years. They have a par value of $1,000 and an annual coupon of
tatuchka [14]

Answer:

$898.54

Explanation:

The Price of the Bonds is equal to the Present Value or Fair Value of the Bonds.

Using the Financial Calculator, Input elements will be as follows :

N = 15

pmt = $1,000 × 5.7% = $57

YTM / i = 6.8%

Fv = $1,000

Pv = ?

Pv = $898.54

The Coupon rate is lower than the market rate thus the Bonds will fetch a lower price.

5 0
3 years ago
In a _____________________ contract, a family worked a small part of a large farm in exchange for part of the crop.
sweet [91]

In a tenancy contract, a family worked a small part of a large farm in exchange for part of the crop.

<h3>What is a tenancy contract?</h3>

Tenancy agreement or rental contract is a legally enforceable agreement that grants the renter use of a property for a specific usage and time period. The agreement outlines every aspect of the lease as well as the standards and expectations that were mutually agreed upon by the parties.

A lease, which is more common for a fixed time, is different from a rental agreement, which is a contract of the rental between the owner of a property and a renter who wants to have temporary possession of the property. Rental agreements are typically written.

An arrangement between you and a landlord is known as a tenancy agreement. As long as you pay rent and abide by the rules, you are permitted to occupy a property. It also outlines the tenancy's legal terms and restrictions.

A tenancy agreement is regarded as a periodic lease in the business world, with a one-month notice period for termination available to either the landlord or the tenant.

To learn more about tenancy contracts refer to:

brainly.com/question/939712

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5 0
1 year ago
Dominique's health insurance plan requires that all tests and specialist visits
Artyom0805 [142]

Answer:

The right option is A that is HMO

Explanation:

HMO is the term which stated as the Health Maintenance Organization, which is a kind or type of the plan that offers a wider range of the services of health  cares via or through a network of providers who agreed in order to supply the services to the members.

So, HMO is the kind of insurance plan where all tests and the specialist visit need to be approved by the doctor.

7 0
3 years ago
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Korvikt [17]

Answer:

This is a situation arising from objective impossibility.

Explanation:

The contract was made for mint condition of car. The car damaged while it was with Frank. Thus, parties are thus discharged from their obligations under the contract.

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Help fast <br><br><br><br>for 10 pts​
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