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sp2606 [1]
3 years ago
10

Consider the following spot interest rates for maturities of one, two, three, and four years. r1 = 4.1% r2 = 4.5% r3 = 5.2% r4 =

6.0% What are the following forward rates, where f1, k refers to a forward rate for the period beginning in one year and extending for k years? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Business
1 answer:
Nuetrik [128]3 years ago
4 0

Answer:

Consider the following calculations

Explanation:

According to this general formula

f1,k = [(1+rk+1)k+1/((1+r1)]1/k -1

f1,1 = [(1+ 4.9%)1+1/((1+4.4%)]1/1 -1 = 5.40%

f1,2 =  [(1+ 5.6%)2+1/((1+4.4%)]1/2 -1 = 6.21%

f1,3 =  [(1+ 6.4%)3+1/((1+4.4%)]1/3 -1 =7.08%

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1) You are considering purchasing a 20 year bond from Saudi Arabia. You have a required return
inessss [21]

Answer:

$812.20

Explanation:

Given the following bond characteristic:

Coupon rate = 12%

Market or yield rate = 15%

Years to maturity = 20 years

Face or par value = $1000

Inputting the values into a bond value calculator, the bond value output is : $812.20

This means that the sum of the present value of all likely coupon payment and par at maturity. It is simply the present value of all cash streams it is projected to generate.

6 0
3 years ago
Mr. Ballard retired in 2018 at age 69 and made his first withdrawal of $35,000 from his traditional IRA. At year-end, the IRA ba
serg [7]

Answer:

a)

Contributions amounting to $320,000 were non deductible.

<u>First year of withdrawal:</u>

Taxfree withdrawal % = Uncovered Investments / Current year value x 100

Taxfree withdrawal % = [$320,000 / ($441,000 + $35,000)] x 100

Taxfree withdrawal % = [$320 / $476,000] x 100

Taxfree withdrawal % = 67.23%

Amount of taxfree withdrawal = 67.23% x $35,000

Amount of taxfree withdrawal = $23,530.5

Taxable amount = Total Withdrawal - Tax free withdrawal

Taxable amount = $35,000 - $23,530.5

Taxable amount = $11,469.5

<u>Second year of withdrawal:</u>

Taxfree withdrawal % = [($320,000 - $23,530.5) / ($407,000 + $60,000)] x 100

Taxfree withdrawal % = [$296, 469.5 / $467,000] x 100

Taxfree withdrawal % = 63.48%

Amount of taxfree withdrawal = 63.48% x $60,000

Amount of taxfree withdrawal = $38,088

Taxable amount = $60,000 - $38,088

Taxable amount = $21,912

b)

$35,000 would be included in taxable income in first year and $60,000 would be included in taxable income in second year.

8 0
3 years ago
Bramble Corp. has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear
Makovka662 [10]

Answer:

37%

Explanation:

The computation of the weighted average contribution margin ratio is shown below:

= Contribution margin ratio ×  weightage

= 30 × 65% + 50 × 35%

= 37%

We simply multiplied the contribution margin ratio with the weightage so that the  weighted-average contribution margin ratio could come and the same to be considered

6 0
3 years ago
Cabell Products is a division of a major corporation. Last year the division had total sales of $25,720,000, net operating incom
timurjin [86]

The minimum rate of return demanded by the firm is 12%. The closest turnover in the division is 4.02. Here option B is the correct answer.

A company's turnover is the total of its sales during a specific time period. It is sometimes referred to as "income" or "gross revenue."

The typical quantity of assets required to carry out continuing business activities is referred to as average operational assets. This number may be incorporated into the operational assets ratio, which evaluates how much of these assets make up overall assets owned by a company.

Divide the total number of separations that took place within the specified time period by the average number of employees to get your turnover rate. To express that amount as a percentage, multiply it by 100.

Turnover = Sales/Average operating assets

= 25720000/6400000

Turnover = 4.02

To learn more about turnover

brainly.com/question/29214829

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7 0
1 year ago
Devon had a starting balance of $54.00 in his savings passbook. He made these transactions: deposits of $54.87 and $86.35; withd
Zielflug [23.3K]

Answer:

$125.22

Explanation:

5 0
3 years ago
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