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stich3 [128]
3 years ago
14

A pension fund has an average duration of its liabilities equal to 15 years. The fund is looking at 5-year maturity zero-coupon

bonds and 4% yield perpetuities to immunize its interest rate risk. How much of its portfolio should it allocate to the zero-coupon bonds to immunize if there are no other assets funding the plan?
Business
1 answer:
gayaneshka [121]3 years ago
7 0

Answer:

The 52 of its portfolio should be allocated to the zero-coupon bonds to immunie if there are no other assets funding the plan.

Explanation:

the duration of the perpetuity = (1+YTM)/YTM

                                                  = (1+0.04)/0.04

                                                  = 26 years

the weights of the bonds = w

5*w + 26*(1-w) = 15

5*w + 26 - 26*w = 15

21*w =  11

w = 0.52

Therefore, The 52 of its portfolio should be allocated to the zero-coupon bonds to immunie if there are no other assets funding the plan.

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Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes a.
matrenka [14]

Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes 4)Merchandise Inventory.

Product vending is the practice of intentionally promoting, showing, and promoting the goods in your keep. A huge part of this is visual merchandising—the process of making plans, designing, and showing merchandise to focus on their capabilities and advantages.

Merchandising is the exercise and procedure of displaying and selling merchandise to clients. Whether or not digital or in-save, stores use vending to persuade clients' motives and reach their sales goals.

Vending approach selling merchandise to retail customers. Merchandisers, also known as retailers, buy merchandise from wholesalers. Manufacturers, upload a markup or gross earnings quantity and sell the products to customers at a better rate than what they paid.

Disclaimer: The question is incomplete. Please read below to find the missing content.

Question: Under the perpetual inventory system, all purchases of merchandise are debited to the account

1)Cost of Merchandise Available for Sale

2)Cost of Merchandise Sold

3)Purchases

4)Merchandise Inventory

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3 0
1 year ago
If an investor's holding period is longer than the term to maturity of a bond, he or she is exposed to___________ A) interest-ra
Zigmanuir [339]

Answer:              

option B

Explanation:

Reinvestment risk refers to the possibility that potential cash flow will have to be invested in low-yielding assets, like coupons (the annual interest charges on the bond) or the eventual returns of the investment.

Reinvestment risk refers to one of financial risk's primary styles. The term is used to describe the threat of anyone canceling or stopping a particular investment, which one might need to find another place to reinvest the cash with the risk of not getting an equally attractive prospect.

Thus, from the above we can conclude that correct option is B .            

7 0
2 years ago
PLEASE HELP!!!!! Nicholas starts a taxi cab business. He buys a garage, hires three drivers, buys two taxi-cabs, he sends his ca
Nostrana [21]
A. The purchased taxi cabs.
The gov. Uses it as capital investment since it is a mode of public transportation. The answer could also be c so people can drive it (with proper training) so other people can use it.
3 0
3 years ago
Match the tasks with the professionals who would complete them.
SVEN [57.7K]

Answer: The correct answers are,

A)Civil Engineer 5)designs and oversees a large construction

process

B)Logging Equipment Manager 6categorizes trees based

on their knot size, straightness, and other characteristics

C)Energy Auditor 4)reduces the amount of energy homeowners and companies use

Explanation:

4 0
3 years ago
Dan saves a portion of his income in an interest-earning account. in the loanable funds market, dan is:________
AlexFokin [52]

Answer:

Dan is the "supplier" of the funds

Explanation:

Given their willingness to lend their money, savers in this marketplace are on the supply side of the economy.

What is the loanable fund market?

The market that connects savers and borrowers is the loanable funds market.

Model of the market for loanable money

To make what occurs in the economy when borrowers and savers interact more understandable, the loanable funds market model is utilized. A modification to the market model for commodities and services is the market model for loanable funds. In this hypothetical scenario, the exchange of money takes the place of a good and the interest rate replaces the price. In essence, it describes how loans are made and borrowed money is exchanged between borrowers and lenders.

To know more about the loanable fund market visit:- brainly.com/question/15851247

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3 0
2 years ago
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