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alekssr [168]
3 years ago
5

Refer to the amortization tables in your slides. If the beginning balance of the bond (issued at a discount) is $885.30, the cas

h payment is $50 (coupon rate is 5%, face value of bond is $1,000), and the annual market interest rate for the period is 6%, what is the amount of amortization and the ending balance of the bond
Business
1 answer:
slega [8]3 years ago
6 0

Answer:

The correct answer is $3.12 and $888.42.

Explanation:

According to the scenario, the given data are as follows:

Beginning balance = $885.30

cash payment = $50

Face value of bond = $1,000

Interest rate = 6%

We can calculate the amortization amount by using following formula:

Amortization amount = Interest expense - cash payment

Where,  Interest expense = Beginning balance × interest rate

= 885.30 x 6%

= $53.12

By putting the value, we get

Amortization amount = 53.12 - 50

= $3.12

And,  Ending balance of bond = Beginning balance of bond + Amortization amount

= 855.30 + 3.12

= $888.42

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Answer:

Co-Creation of value

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3 years ago
Consider the following information for three stocks, A, B, and C. The stocks' returns are positively but not perfectly positivel
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Answer:

Consider the following information for three stocks, A, B, and C. The stocks' returns are positively but not perfectly positively correlated with one another, i.e., the correlations are all between 0 and 1. Expected Standard Stock Return Deviation Beta

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C 12% 12%1.4

Portfolio AB has half of its funds invested in Stock A and half in Stock B. Portfolio ABC has one third of its funds invested in each of the three stocks. The risk-free rate is 5%, and the market is in equilibrium, so required returns equal expected returns. Which of the following statements is CORRECT?

Question 13 options:

a) Portfolio ABC's expected return is 10.66667% correct answer

. b) Portfolio AB has a standard deviation of 20%.

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8 0
2 years ago
Shaan and Anita currently insure their cars with separate companies, paying $790 and $645 a year. If they insure both cars with
iren2701 [21]

Answer:

The future value of annual savings is $1,370.30

Explanation:

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=-fv(rate,nper,pmt,-pv)

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2 years ago
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topjm [15]
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3 years ago
The two main purposes of a business plan are: a. to provide a document to keep employees focused and to seek outside funding. b.
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Hence from the above we can conclude that the correct option is A.

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