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valkas [14]
3 years ago
6

A government bond with a coupon rate of 8% makes semiannual coupon payments on January 14 and July 14 of each year. The Wall Str

eet Journal reports the asked price for the bond on January 29 at $1,000.625. What is the invoice price of the bond? The coupon period has 182 days. (Round your answer to 2 decimal places.)
Business
2 answers:
leonid [27]3 years ago
8 0

Answer:

$1003.92

Explanation:

The invoice price is calculated as the reported price plus the accrued interest. Therefore, the formula for accrued interest is shown below:

Accrued Interest =  \frac{Annual coupon payment}{2} * \frac{days since last coupon payment}{days separating coupon payments}

Given that the coupon rate is 8%, therefore the bond pays $80 of coupon payments every year.

January 14 was the day that the last coupon was paid, so it has been 14 days since the last payment.

The coupon period is 182 days.

Therefore, the accrued interest is

= \frac{80}{2} *  \frac{14}{182} \\= 3.297

The invoice price is calculated as:

$1000.625 + $3.297

= $1003.922.

Therefore the invoice price of the bond is $1003.92

Anettt [7]3 years ago
7 0

Answer:

$1,003.92

Explanation:

the invoice price (or dirty price) of the bond = bond's market price + accrued interest:

  • bond market price = $1,000.625 (given by WSJ)
  • accrued interest = (coupon* / days within the period) x days passed since last coupon paid = ($40/182 days) x 15 days = $0.21978 x 15 days = $3.2967

dirty price = $1,000.625 + $3.2967 = $1,003.92

*semiannual coupon = $1,000 x 8% x 1/2 = $40

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Ming is a manager for a large foodservice company. She has the authority to determine whether or not the company should expand i
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Answer:

Strategic

Explanation:

If Ming is a manager for a large company and has the authority to determine whether or not the company should expand into new regions and/or expand the company's product line, Then the level of management that Ming represents is Strategic Management

Strategic management involves setting objectives, <u>analyzing the competitive environment</u>, analyzing the internal organization, evaluating strategies, and ensuring that management rolls out the strategies across the organization.

Business expansion decisions are taken by the highest level of management based on their analysis of the competitive environment

8 0
3 years ago
If the market price ​'Pmkt​' is above the price ​'P0​', then quantity supplied is_________ equal to greater than quantity demand
Evgen [1.6K]

The quantity supplied at this level of price is less than the quantity demanded and therefore the market is in shortage situation.

<u>Explanation:</u>

If the current price of the market is above the price P0, then the level of the quantity supplied of the good is less than the level of quantity demanded of that good at this level. With the less quantity supplied, there will be a situation of shortage of the quantity of goods in the market.

6 0
3 years ago
Barney builds custom wooden birdhouses. he can make 150 birdhouses per month and sell them for $50 each. his average total cost
musickatia [10]

Answer:

125 birdhouses per month

Explanation:

Barney=150 birdhouses

Total product=150 birdhouses

If Barney hires Fred

Fred =125 birdhouses

Total product=150+125

=275 birdhouses

Marginal product can be defined as a change in output as a result of a change in variable inputs

It can be calculated as follows

Marginal product=change in total product/change in variable inputs

=275-150/1

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4 0
3 years ago
Statement 1: The onset of 5% inflation means that your receipt of a $100 interest payment allows you to purchase only $95 worth
Nimfa-mama [501]

Answer:

A. 1 and 4 are true

Explanation:

Statement 1: When inflation goes up the market prices of goods increase and reduces buying power of customer. So, if you get $100 even after 5% inflation, you would get $95 worth good.

Statement 2: It is commonly known as, the higher the risk the higher the gain. So, risk premium and risk exhibited by security is directly related with each other.

Statement 3: Since, risk free rate is the compensation for time value of money, that is why it can’t make real risk-free rate negative because real risk rate is there, but inflation can go higher than risk free rate.

Statement 4: Maturity payment is paid to investors or savers after certain period of time along with principal amount.

Hence, A. 1 and 4 are true

6 0
3 years ago
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