1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
chubhunter [2.5K]
4 years ago
7

A risk-free bond will pay you $1,000 in 2 years and nothing in between. The annual discount rate is i=27.5% compounded annually.

What is the bond's present value?
Business
1 answer:
denis23 [38]4 years ago
3 0

Answer:

$615.15

Explanation:

Since we have only one cashflow at the end of 2 years and no coupons, find present value (PV). You can use a financial calculator and input the following;

Future value ; FV = 1,000

Duration; N = 2

Interest rate; I/Y = 27.5%

Coupon payments ;PMT = 0

then compute present value; CPT PV = 615.148

Therefore, the bond's PV is $615.15

You might be interested in
Annual means compounded once a year. <br> True <br> False
luda_lava [24]
Annual means compounded once a year. This statement is true. Compounded means gathered together. Example of annual are => Annual salary - In which your monthly salary is being calculated together to be able to have the total of annual salary. => Annual interest - in which the monthly interest is being add up together to get to annual interets.<span>Annual also known as yearly. Being calculated the total number of amount accumulated in one whole year.</span>
3 0
4 years ago
If you owned a trade secret, what methods would you employ to protect it?
Fantom [35]

Answer:

You would restrict access to the information,advise new employees and you would have an agreement with employees abd business partners.

7 0
3 years ago
As a student in what way you can solve the problem of scarcity
Rudiy27

Answer:

Explanation:

Increase production i.e; facilitate the production to the maximum of the capacity in the short run. Ensure longer term innovation and investment to reduce risk for future. Keep educating the children to take care of future needs.

5 0
3 years ago
Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contrib
zloy xaker [14]

Answer:

$0

Explanation:

Given that

Sue contributed amount = $18,000

FMV of land = $63,000

Basis in land = $28,000

Andrew contributed amount = $20,000

FMV of Building = $41,000

Basis in equipment = $16,000

Basis in building = $28,000

Based on the above information, the gain that would be recognized is $0 as Partnerships recognize no gain on receiving contributed valued property. At the disposal of the asset, the constructed-in benefit or constructed-in loss will be revealed. For this, the partnership basis property i.e being acquired should be based on a carryover basis.

7 0
4 years ago
You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 15% APR, compounded
Bess [88]

Answer:

The lower rate is when you put it into your credit card.

Explanation:

Credit card: rate = (1 + 15%/12)^12 - 1

EAR = 16.08%

Parents loan = ( 1 + 8%)^2 - 1

EAR parents = 16.64%

Therefore, The lower rate is when you put it into your credit card.

8 0
4 years ago
Other questions:
  • When the balance of the income summary account is a​ debit, the entry to close this account​ is:
    10·1 answer
  • Mention the major jobs of pharmacist​
    15·2 answers
  • What are the foundation of the case for free trade?
    12·1 answer
  • "A customer owns an ABC Call option. ABC declares a dividend for shareholders on record July 10th. The last day to exercise the
    10·1 answer
  • Assume the spot rate on the Canadian dollar is C$1.2648, the risk-free nominal rate in the U.S. is 3.3 percent, and the risk-fre
    8·1 answer
  • Help me please.. there is no option on here for Human Resources principals, so I jus clicked business as the subject..
    15·1 answer
  • Tái chế không phải 1 phương pháp hoàn hảo để giải quyết vấn đề ô nhiễm mt
    10·1 answer
  • Greg got in over his head and kept buying things on his credit card that he couldn’t really afford. He ended up not being able t
    10·2 answers
  • Write 2-3 sentences to explain how obama's foreign policy compared to bush's foreign policy.
    15·1 answer
  • Describe how crashing and fast tracking can be used to compress a project schedule. What limitations could there be with each of
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!