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Sedaia [141]
2 years ago
9

A 6 percent, annual coupon bond is currently selling at a premium and matures in 7 years. The bond was originally issued 3 years

ago at par. Which one of the following statements is accurate in respect to this bond today?a. The face value of the bond today is greater than it was when the bond was issued.b. The bond is worth less today than when it was issued.c. The yield-to-maturity equals the current yield.d. The coupon rate is less than the current yield.e. The yield-to-maturity is less than the coupon rate.

Business
2 answers:
Ksju [112]2 years ago
8 0

Answer:

e. The yield-to-maturity is less than the coupon rate.

Explanation:

When the yield is lower than the coupon rate, the bond is considered to be trading at a premium.

Price of bond = Present value of future coupon payments and present value of par value to be recieved on the date of maturity, discounting is done athe the rate at which market is prevailing.

Hence, if the yield rate is the prevailing market rate,coupon rate is compared to yield rate to invest in bond because the coupon is more compared to market rate.

Thus the investors would be charged more than the par value which is being traded at premium in order to set off the benefit of the payments of coupon.

vekshin12 years ago
6 0

Answer and Explanation:

the answer is attached below

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Allison invested $23,000 in an account paying an interest rate of 6.7% compounded annually. Assuming no deposits or withdrawals
Vadim26 [7]

Answer:

18 years

Explanation:

Given that;

P= $23,000

A= $76,300

r= 6.7%

From

A = P(1 + r/100)^n

76,300 = 23,000 (1 + 0.067)^n

3.3 = (1.067)^n

Taking logarithm of both sides

log 3.3 = log (1.067)^n

log 3.3 = nlog(1.067)

n= log 3.3/log 1.067

n= 0.5185/0.0282

n= 18 years ( to the nearest year)

8 0
3 years ago
A manuscript is sent to a typing firm consisting of typists A, B and C. If it is typed by A, then the number of errors made is a
spin [16.1K]

Answer:

(a) E(X) = 3

(b) Var(X) = 12.1067

Explanation:

(a) E[X]

E[X]T = E[X]T=A + E[X]T=B + E[X]T=C

         = (2.6 + 3 + 3.4)/3

         = 2.6 (1/3) + 3(1/3) + 3.4(1/3)

         = 2.6/3 + 1 + 3.4/3

         = 3

(b) Var (X) = E[X²]−(E[X])²

Recall that if Y ∼ Pois(λ), then E[Y 2] = λ+λ2. This implies that

E[X²] = [(2.6 + 2.6²) + (3 + 3²) + (3.4 + 3.4²)]/3

         = (9.36 + 12 + 14.96)/3

         = 36.32/3

         = 12.1067

Var(X) = E[X²]−(E[X])²

          = 12 - 3²

          = 12.1067 - 9

          = 3.1067

8 0
3 years ago
A steering committee identifies and assesses all possible systems development projects that the organization could undertake.
Mashcka [7]
The appropriate response is Information Systems Planning. It is the procedure whereby a senior chief, a business gathering, an IS administrator or a controlling board distinguishes and evaluates every single conceivable framework improvement extends that an association could embrace.
6 0
3 years ago
Prepare the general journal entries for Culver Company for____________.(a) The 2020 adjusting entry.(b) The sale of the Gordon s
-Dominant- [34]

Answer:

a) Debit fair value loss $7,900 Credit Investment $7,900

b) Debit Bank $66,300, Debit Fees $1,200 Credit investment $67,500

c) Debit investment $53,800, Credit Fees $1,300 Credit Bank $52,500

d) Debit Fair value loss $10,400 Credit Investment $10,400

Explanation:

c) the purchase of stock include fees and the fees are included in the cost of the shares and increase the cost of the asset hence they are capitalised on the cost. The fees are an expense directly associated with the purchase therefore are attributable costs.

the completed question

E17-15

(Equity InvestmentsTrading) Culver company has the following securities in its trading port- folio of securities on December 31, 2020.

Investments (Trading)                                                              Cost                                     Fair Value

1,500 shares of Gordon, Inc., Common                     $73,500                                   $ 69,000

5,000 shares of Wallace Corp., Common                  180,000                                   175,000

400 shares of Martin, Inc., Preferred                         60,000                                     61,600

$313,500                                 $305,600                                    

All of the securities were purchased in 2020.

In 2014, Culver completed the following securities transactions.

March 1Sold the 1,500 shares of Gordon, Inc., Common, @ $45 less fees of $1,200

April 1   Bought 700 shares of Earnhart Corp., Common, @ $75 plus fees of $1,300

Culver Companys portfolio of trading securities appeared as follows on December 31, 2021

Investments (Trading)            Cost                             Cost                            Fair Value

5,000 shares of Wallace Corp., Common      $180,000                     $175,000

700 shares of Earnhart Corp. Common         53,800                         $50,400

400 shares of Martin, Inc. Preferred              60,000                         $58,000

                                                                       293,800                       283,400

Instructions

Prepare the general journal entries for Culver Company for:

(a)The 2020 adjusting entry.

(b) The sale of the Gordon stock.

(c)The purchase of the Earnhart stock.

(d) The 2021 adjusting entry for the trading portfolio

3 0
3 years ago
In the Control Process, it is important to use the proper comparison method when comparing task results with its objectives and
DaniilM [7]

Answer: Personal comparison

Explanation:

When it comes to the Control Process, entities are allowed to use several comparison methods when comparing task results with objectives.

These include:

  • the Historical method where current performance is compared to past performance
  • the Relative comparison method where the organization's performance is compared against a benchmark of other organizations in the industry.
  • Engineering comparison where schedules are used to ensure that activities finish on time.

Personal comparison is not an acceptable method.

4 0
2 years ago
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