Answer:
(a) The arbitrage strategy is to buy zeros with face values of $140 and $1,140 and respective maturities of one and two years, and simultaneously sell the coupon bond.
(b) The profit on the activity equals $0.72 on each bond.
Explanation:
The price of the coupon bond = 140 × PV(7.9%, 2) + 1000 × PV(7.9%, 2)
= 140 × (1-(1/1.079)^2)/0.079 + 1,000/1.079^2
= $1,108.93
If the coupons were withdrawn and sold as zeros individually, then the coupon payments could be sold separately on the basis of the zero maturity yield for maturities of one and two years.
[140/1.07] + [1,140/1.08^2] = $1,108.21.
The arbitrage strategy is to buy zeros with face values of $140 and $1,140 and respective maturities of one and two years, and simultaneously sell the coupon bond.
The profit on the activity equals $0.72 on each bond.
Answer: $150,000
Explanation:
Seeing as the litigation expense will only be paid in 2018, it should be added back to income for 2015.
= 900,000 + 100,000
= $1,000,000
As the depreciation will reverse evenly over the next three years and with future income probable, it should be removed from income.;
= 1,000,000 - 300,000
= $700,000
Municipal Bonds have the advantage of being Tax-exempt so their interest income should be removed to calculate how much tax should be paid.
= 700,000 - 200,000
= $500,000
2015 Income Tax Payable = 500,000 * 30%
= $150,000
Feedback Control <span>is a mechanism for gathering information about performance deficiencies after they occur.</span>
Answer:
Your answer to your Question is D. economists always agree on solutions to economic problems and have helped solve all major global financial crises.I HOPE I HELPED YOU GIVE ME BRAINLIST PLEASE Thank you have a nice day!
Typically, stakeholders do not complain that the company is directionless after hearing a well-developed and expressed strategic vision.
<h3>What Is Vision, Exactly? And why is it so crucial for a leader to convey their vision?</h3>
The organization's desired achievement or future state is described by its vision. To motivate, define, and focus the effort, a vision must be communicated in order to fulfill its purpose.
One of your responsibilities as a leader is to inspire dedication to your organization's goal, as stated in our handbook Communicating Your Vision. You must convey the vision in a way that matters to people in order to accomplish this. You want the organization's members to embrace the vision and spread it to others.
The organization's vision needs to be communicated by the leaders in several different methods.
To know more about "Vision", visit: brainly.com/question/28327881
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