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Semmy [17]
3 years ago
7

You just purchased a bond that matures in 12 years. The bond has a face value of $1,000 and a 7% annual coupon. The bond has a c

urrent yield of 5.74%. What is the bond's yield to maturity
Business
1 answer:
Andreas93 [3]3 years ago
4 0

Answer:

The coupon value is 1000 × 7%  = $70

Face Value is $1000

Current price is annual ÷ current yield ∵ 70÷0.0574= $1,219.54

Maturity period: 12 years

YTM of Bond = (70+((1000-1,219.54 / 12)) / ((1000+1,219.54)/ 2) = 4.66 percent

Explanation:

The coupon value is 1000 × 7%  = $70

Face Value is $1000

Current price is annual ÷ current yield ∵ 70÷0.0574= $1,219.54

Maturity period: 12 years

YTM of Bond = (70+((1000-1,219.54 / 12)) / ((1000+1,219.54)/ 2) = 4.66 percent

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Brooke and John formed a partnership. Brooke received a 40% interest in partnership capital and profits in exchange for contribu
choli [55]

Answer:

$102,000

Explanation:

Since Brooke contributed the land, the gain realized before the land was contributed = $120,000 - $90,000 will be allocated entirely to her. She will also be allocated 40% of the gain after the contribution was made = ($150,000 - $120,000) x 40% = $30,000 x 40% = $12,000.

So the total gain recognized by Brooke will be $90,000 + $12,000 = $102,000.

Partnerships are pass through entities, the partners are taxed, not the partnership itself.

7 0
3 years ago
Measures of dispersion are often used in finance as a proxy for risk. Explain​
Schach [20]

<u>Measures of dispersion are often used in finance as a proxy for risk:</u>

Measures of dispersion are generally used to describe the variability in sample. The three commonly used measures of dispersion are as follows,

  • Interquartile range - Difference between the 25^{th} and 75^{th} percentile (also known as the 1^{st} and 3^{rd} quartile). The formula is \bold{\text{Interquartile range = Q3 - Q1}}
  • Range - Difference between the largest and smallest observation. The formula is \bold{\text{Range = maximum value - minimum value}}
  • Standard deviation - SD is the square root of sum of squared deviation from the mean divided by the number of observations. The formula is as follows, \bold{\sigma=\sqrt{\frac{\sum\left(x_{i}-\mu\right)^{2}}{N}}}

Appropriate usage of measures of dispersion:

Median and interquartile range is used for skewed numerical data, ordinal data or mean. When mean is utilized as a measure of central tendency or symmetric numerical data, SD is used.

Usage in finance:

In finance, the Regression analysis technique helps in explaining the dispersion of dependent variable, that is measured by its variance, with the help of one or more independent variables each of which has positive dispersion. This proves to be a proxy for risk.

4 0
3 years ago
Wriston Company is preparing its cash budget for the upcoming month. The beginning cash balance for the month is expected to be
ch4aika [34]

Answer:

$2,100

Explanation:

Cash Available = Opening Balance + Receipts - Disbursements - Desired Balance

                          = $15,000 +$89,600  - $72,500 - $30,000

                          = $2,100

Therefore,

The excess  of cash available over disbursements for the month would be  $2,100

7 0
3 years ago
Ceria Republic is a country that has achieved rapid economic growth and prosperity over the last couple of decades as a result o
lyudmila [28]

Answer:

A. Greater collectivism

Explanation:

Collectivism occurs when members are interdependent putting common goals over individual pursuits. The direct opposite is individualism. Over times, studies has shown that changes in societal beliefs has led to globalization and economic advancement. It also indicates that a pull away from greater collectivism accompanies economic development. This is because, individualism promotes economic development by driving individuals need to invest, innovate and accumulate wealth. As a result, collectivism is said to impede economic development and individualism is said to facilitate it.

3 0
3 years ago
A bond with semi-annual coupon payments has the following characteristics: Par value of $10,000; coupon rate of 10% (annual); ma
Deffense [45]

Answer:10,971.22!!!!!!!!!!!!!!!!!!!!

Explanation:

5 0
4 years ago
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