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
My name is Ann [436]
3 years ago
13

Treasury spot interest rates are as follows: Maturity (years) 1 2 3 4 Spot rate (EAR) 1.4% 2.8% 3.6% 4.5% What is the price of a

risk-free zero-coupon bond with 3 years to maturity and a face value of $1,000 (in $)? (answer,0+ decimals)
Business
1 answer:
Salsk061 [2.6K]3 years ago
8 0

Answer: $868

Explanation:

Given the following :

Maturity (years) - - - - - - 1 - - 2 - - - 3 - - - 4

Spot rate (EAR) - - - - 1.4% - 2.8% - 3.6% - - 4.5%

What is the price of a risk-free zero-coupon bond with 3 years to maturity and a face value of $1,000 (in $)?

Face value / ( 1 + spot rate)^p+1

Where P = year

=1000/(1+3.6%)^4

1000 / ( 1 + 0.036)^4

1000/(1.036)^4

1000/1.151964303616

=$868.08245

You might be interested in
The following were selected from among the transactions completed during the current year by Danix Co., an appliance wholesale c
Vika [28.1K]

The journal entries for the transactions by Danix co during the year, using a 360-day year are as follows:

Jan. 21 Debit Accounts Receivable (Black Tie Co.) $29,400

Credit Sales Revenue $29,400

Debit Cost of Goods Sold $17,640

Credit Inventory $17,640

Mar. 18 Debit Note Receivable (Black Tie Co.) $29,400

Credit Accounts Receivable (Black Tie Co.) $29,400

60-day, 6% note

May 17 Debit Cash $29,694

Credit Note Receivable (Black Tie Co.) $29,400

Credit Interest Revenue $294

June 15 Debit Accounts Receivable (Pioneer Co.) $15,700

Credit Sales Revenue $15,700

Debit Cost of Goods Sold $9,420

Credit Inventory $9,420

June 21 Debit 8% Note Receivable (JR Stutts) $6,000

Credit Cash $6,000

a 30-day, 8% note.

June 25 Debit Cash $15,700

Credit Accounts Receivable (Pioneer Co.) $15,700

July 21 Debit Cash $40

Credit Interest Revenue $40 ($6,000 x 8% x 30/360)

9% Note Receivable (JR Stutts) $6,000

Credit 8% Note Receivable (JR Stutts) $6,000

To record the exchange with a 60-day, 9% note.

Sept. 19 Debit Cash $6,090

Credit 9% Note Receivable (JR Stutts) $6,000

Credit Interest Revenue $90

($6,000 x 9% x 60/360)

Sept. 22 Debit Accounts Receivable (Wycoff Co.) $60,000

Credit Sales Revenue $60,000

Debit Cost of Goods Sold $36,000

Credit Inventory $36,000

Oct. 14 Debit 6% Note Receivable (Wycoff Co.) $60,000

Credit Accounts Receivable (Wycoff Co.) $60,000

Accepted a 60-day, 6%

Dec. 13 Debit Accounts Receivable (Wycoff Co.) $60,600

Credit Interest Receivable $600

Credit 6% Note Receivable (Wycoff Co.) $60,000

Dec. 28 Debit Cash $60,903

Credit Interest Receivable $600

Credit Accounts Receivable (Wycoff Co.) $60,600

Credit Interest Revenue $303

($60,600 x 12% x 15/360) interest for 15 days at 12% computed on the maturity value of the note.

Data Analysis:

Jan. 21 Accounts Receivable (Black Tie Co.) $29,400 Sales Revenue $29,400

Cost of Goods Sold $17,640 Inventory $17,640

Mar. 18 Note Receivable (Black Tie Co.) $29,400 Accounts Receivable (Black Tie Co.) $29,400 60-day, 6% note

May 17 Cash $29,694 Note Receivable (Black Tie Co.) $29,400 Interest Revenue $294

June 15 Accounts Receivable (Pioneer Co.) $15,700 Sales Revenue $15,700 Cost of Goods Sold $9,420 Inventory $9,420

June 21 8% Note Receivable (JR Stutts) $6,000 Cash $6,000 a 30-day, 8% note.

June 25 Cash $15,700 Accounts Receivable (Pioneer Co.) $15,700

July 21 Cash $40 Interest Revenue $40 ($6,000 x 8% x 30/360)

9% Note Receivable (JR Stutts) $6,000 8% Note Receivable (JR Stutts) $6,000

60-day, 9% note

Sept. 19 Cash $6,090 9% Note Receivable (JR Stutts) $6,000 Interest Revenue $90 ($6,000 x 9% x 60/360)

Sept. 22 Accounts Receivable (Wycoff Co.) $60,000 Sales Revenue $60,000

Cost of Goods Sold $36,000 Inventory $36,000

Oct. 14 6% Note Receivable (Wycoff Co.) $60,000 Accounts Receivable (Wycoff Co.) $60,000

Accepted a 60-day, 6%

Dec. 13 Accounts Receivable (Wycoff Co.) $60,600 Interest Receivable $600 6% Note Receivable (Wycoff Co.) $60,000

Dec. 28 Cash $60,903 Interest Receivable $600 Accounts Receivable (Wycoff Co.) $60,600Interest Revenue $303 ($60,600 x 12% x 15/360) interest for 15 days at 12% computed on the maturity value of the note.

Learn more about recording business transactions here: brainly.com/question/25242891

3 0
2 years ago
Roy's Welding has annual sales of $96,700, a profit margin of 7.45 percent, and a payout ratio of 40 percent. The firm has $11,5
grin007 [14]

Answer: 11.26%

Explanation:

From the question, we are told that Roy's Welding has annual sales of $96,700, a profit margin of 7.45 percent, and a payout ratio of 40 percent ans that the firm has $11,500 of debt and owners' equity of $31,200.

The internal growth rate for this firm assuming the payout ratio remains constant goes thus:

We have to calculate the net income first and this will be:

= $96700 × 7.45%

= $7204.15

The total assets will be debt plus the equity. This will be:

= $11500 + $31200

= $42700

ROA will now be net income divided by

the total assets which will be:

=7204.15/42700

= 0.1687

Retention ratio will be:

= 1-payout ratio

= 1 - 40%

= 1 - 0.4

= 0.6

Therefore, internal growth rate will be:

=(ROA × Retention ratio)/[1-(ROA × Retention ratio)]

=(0.1687 × 0.6)/[1-(0.1687 × 0.6)]

= 0.10122/(1 - 0.10122)

= 0.10122/0.89878

= 0.1126

=11.26%

7 0
3 years ago
Private business dealings based on supply and demand define __________.
Blababa [14]
So here the interplay of supply and demand influences the dealings of the private business - which means that it's not centrally decided but rather  market analysis is done to determine what is needed.

The best answer is: market forces!

If the head of the business was not looking to the market, but rather making central decisions, we could call it "central planning "
5 0
3 years ago
Read 2 more answers
The IMC channel that has received the greatest increase in aggregate spending recently is ________, or marketing that communicat
wariber [46]

The IMC channel that has received the greatest increase in aggregate spending recently is direct marketing  or marketing that communicates directly with target customers to gener­ate a response or transaction.

<u>Explanation: </u>

Direct Marketing is a promotional strategy based on the distribution to potential customers of a marketing strategy.  

The Systems of distribution used include mail, online and texting. Direct marketing is named because it removes intermediaries, like publicity media, in particular.

Direct marketing focuses instead of media advertising on delivery to individual consumers.   In much direct marketing, the call to action is a common factor.   It is easier to quantify than media advertising that direct marketing is successful.

In a number of direct marketing, the call for action is a special element. You are instructed to respond immediately to the request through a free telephone number, a reply card or a reference in the email advertisement. The recipient must also access the letter. A positive measure of a future purchase is any reply. Personal advertising is often linked to as ads for direct responses.

4 0
3 years ago
Frames, Inc. manufactures large wooden picture frames. Each frame requires $19 of direct materials and $40 of direct labor. Vari
Fofino [41]

Answer:

$68 per unit

Explanation:

The computation of the unit product cost of each frame using the variable costing is shown below:

= Direct material cost per unit + direct labor cost per unit + variable manufacturing overhead cost per unit

= $19 + $40 + $9

= $68 per unit

We simply added the above three cost so that the unit product cost could come

3 0
3 years ago
Other questions:
  • Armour, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional labor hours. Overhead was esti
    5·1 answer
  • Which of these statements about processes is not​ true?
    6·1 answer
  • For the current year, a business has earned (but not recorded or received) $200 of interest from investments. Demonstrate the re
    9·1 answer
  • Statistics indicate that over half of the world output now comes from emerging markets. This is leading to a(n) ___________ of l
    7·1 answer
  • The Can Division of Sheffield Corp. manufactures and sells tin cans externally for $0.60 per can. Its unit variable costs and un
    10·1 answer
  • When an organization expands into a totally new line of business, it is implementing a strategy of:?
    6·1 answer
  • National Bank quotes the following for the British pound and the New Zealand dollar:
    12·1 answer
  • Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics, including plastic grocery ba
    14·1 answer
  • Can someone define these will mark as brainliest
    13·1 answer
  • The cpi was 220 in 2012 and 231 in 2013. phil borrowed money in 2012 and repaid the loan in 2013. if the nominal interest rate o
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!