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
NNADVOKAT [17]
3 years ago
15

A $1000 bond with a coupon rate of 6.2% paid semiannually has eight years to maturity and a yield to maturity of 8.3%. If intere

st rates rise and the yield to maturity increases to 8.6%, what will happen to the price of the bond
Business
1 answer:
ohaa [14]3 years ago
7 0

Answer:

The price of the bond will be $879

Explanation:

Price of the bond is the present value of all cash flows of the bond. Price of the bond is calculated by following formula:

According to given data

Coupon payment = C = $1,000 x 6.2 = $62 annually = $31 semiannually

Number of periods = n = 2 x 8 years = 16 periods

Current Yield = r = 8.3% / 2  = 4.15% semiannually

Price of the Bond = $31 x [ ( 1 - ( 1 + 4.15% )^-16 ) / 4.15% ] + [ $1,000 / ( 1 + 4.15% )^16 ]

Price of the Bond = $31 x [ ( 1 - ( 1 + 0.0415)^-16 ) / 0.0415 ] + [ $1,000 / ( 1 + 0.0415 )^16 ]  

Price of the Bond = $31 x [ ( 1 - ( 1.0415)^-16 ) / 0.0415 ] + [ $1,000 / ( 1.0415 )^16 ]  

Price of the Bond = $521.74 + $357.26   = $879

You might be interested in
You are CEO of Eastco, and you recently paid $58,000 or about 2x revenue (well under industry average) to purchase Westco, which
jeka57 [31]

Answto be honest I really don’t know er:

Explanation:

4 0
3 years ago
The organizations likely to benefit the most from the global reach of e-commerce are those that.
ElenaW [278]

The companies likely to advantage the most from the worldwide attain of e-commerce are those who more than one choice

*have already got physical shops, a website, and in-person and online clients worldwide.

*Perform in towns or other regions that accumulate an excessive income tax for or her items or services.

*promote products or services that can be delivered online, inclusive of ebooks or online instructions.

*previously trusted foot site visitors into one physical save to sell their products.

international attain refers to a commercial enterprise initiative to boom the get right of entry to between an agency and their modern and ability customers thru using the internet. The internet allows the corporation to market themselves and entice new clients to their website where they are able to offer product records and higher customer service.

clients can vicinity orders electronically, consequently reducing luxurious long remote cellphone calls and postage prices of placing orders, even saving time on behalf of the purchaser and employer.

A business enterprise striving to achieve international attain ought to offer a code of ethics, an agency shopping policy, extra contact facts, ok product facts, and charges. The website itself has to be multi-lingual, the customer is easy to use and has the capability to secure information.

worldwide e-commerce is the system of promoting products or services online throughout geopolitical borders to customers in foreign nations. compared to local e-commerce, wherein a store most effectively sells within its united states of starting place, international eCommerce lets traders expand into non-native markets and reach new clients.

Learn more about e-commerce here:brainly.com/question/23369154

#SPJ4

3 0
1 year ago
What do successful entrepreneurs have in common?
dmitriy555 [2]

Answer:

market trends change constantly, funding fall through, business partners flake, and ideas may go wrong

4 0
3 years ago
Read 2 more answers
If Texia specializes in food, it can produce 1,000 units of food and 0 units of clothing this year. If it specializes in clothin
Sati [7]

Answer:

Texia; Texia

Explanation:

A country has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other countries

Texia can produce 1000  units of food while Urbania can produce 500  units of food . Texia produces more food

Texia can produce 500 units of clothing while Urbania can produce 200 units of clothing. Texia produces more clothing

Texia has an absolute advantage in both activities

3 0
3 years ago
You have taken out a $350,000, 3/1 ARM. The initial rate of 6.0% (annual) is locked in for 3 years. Calculate the outstanding ba
Vilka [71]

Answer:

Explanation:

  • The Monthly Payment = Loan Amount / PVAF (360,0.50%)

  • The Monthly Payment = 350000 / 166.7916

  • The Monthly Payment = $2098.43

  • Loan Balance after 3 years = PV(0.50%,324,-2098.43) = $336294.2

5 0
3 years ago
Other questions:
  • Issues of growth are generally considered in: Multiple Choice neither the short-run nor the long-run frameworks. the short-run f
    10·1 answer
  • Muldoon Advertising has an opening balance in its supplies account of $2,400 and purchases $3,000 of supplies during the year. A
    15·1 answer
  • How to choose a business name<br>​
    11·2 answers
  • Proposed by Richard Hackman and Greg Oldham, ________ states that work has five core dimensions that impact employee satisfactio
    15·1 answer
  • Katsu Corp. distributes property to its shareholders as part of a complete liquidation. The fair market value of the property is
    5·1 answer
  • Explain why a single commercial bank can safely lend only an amount equal to its excess reserves but the commercial banking syst
    6·1 answer
  • One effective way to manage credit card debt is to:
    7·2 answers
  • You are the executive director of a nonprofit that runs an animal shelter and animal services, such as low-cost spay/neuter prog
    6·1 answer
  • State elements of business plan?
    13·1 answer
  • Assume the marginal propensity to consume (mpc) is 0.80 and the government increases taxes by $100 billion. the aggregate demand
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!