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Licemer1 [7]
3 years ago
10

You just learned that a blue chip company will issue a bond with a maturity of 100 years. The bond appears to be a good deal bec

ause it yields 5.78 percent. Assuming that the inflation rate stays at 4.39 ​percent, what is the​ bond's real rate of return​ today? If you are looking for a bond to purchase and hold for several​ years, will you buy this​ bond? Explain your answer in terms of future inflation projections and the length of the​ bond's maturity.
Business
1 answer:
PIT_PIT [208]3 years ago
4 0

Answer:

The bon's real rate of return is 1.39%.

As we know the inflation rate behave same as the bond yield because the bond yield includes the inflation impact.

In case of if there is a increase in the inflation in future. I will not buy this bond, because the price of the bond will fall and as percentage increases the present value of the cash flows also decreases which is the basis used for pricing the bons.

In case of if there is a decrease in the inflation in future, I will buy this bond, because the price of the bond will rise and as percentage decreases the present value of the cash flows also increases which is the basis used for pricing the bons.

Explanation:

Real Rate of return = Nominal rate - Inflation rate

As Bond yield is nominal rate

Real rate of return = 5.78% - 4.39% = 1.39%

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What is the difference between product value and unique selling proposition?​
cestrela7 [59]

Answer:

USPs and value propositions often get confused

there under two different umbrella .

Keep in mind that your USP doesn’t have to revolve around a product detail (such as quality, features, or price). It can also call attention to a unique aspect of your business more broadly speaking (service, selection, speed, convenience, dependability, guarantees, customization, philanthropy, and so on).

Value propositions are longer statements than USPs because they express the tangible results or concrete outcomes (“benefits”) a customer experiences from using a company’s products or services. They serve to convince your target market they’ll get “value for their money” by describing exactly what that value is. 

7 0
3 years ago
A stock with a beta of 0.6 has an expected rate of return of 13%. If the market return this year turns out to be 10 percentage p
vlada-n [284]

Answer:

what is your best guess as to the rate of return on the stock?

12,2%

Explanation:

Stock        Beta       Return  

   $ 1       0,60         13,0%

Market    

  -10%       -6%        12,2%

5 0
3 years ago
Khái niệm giao tiếp trong tổ chức
Delvig [45]

Answer:

bu kin jhu

Explanation:

John jvghh bugs HHH jhu UV juggle

6 0
3 years ago
The following information was available from the inventory records of Sheffield Corp. for January: Units Unit Cost Total Cost Ba
Ganezh [65]

Answer:

$45,990

Explanation:

The Weighted Average Cost Method, calculates a new Unit Cost with every purchase that is made. This is applicable to perpetual Inventory method. In this case we are required to use the <u>periodic Inventory method</u> (<em>Sheffield does not maintain perpetual inventory records</em>). Thus our Unit Cost is calculated from Inventory available for Sale.

Step 1

<u>Units Available For Sales Calculation :</u>

Opening Balance                           9,200

Add Purchases (6,400 + 7,900)   14,300

Units Available for Sale               23,500

Less Units Sold (7700 + 11300)  (19,000)

Ending Inventory Units                  4,500

Step 2

<em>Unit Cost = Total Cost ÷ Units Available for Sale</em>

                = ($89,516  + $65,984 + $84,609) ÷ 23,500

                = $10.22

Step 3

<em>Ending Inventory = Units in Stock × Unit Cost</em>

                             = 4,500 × $10.22

                             = $45,990

8 0
3 years ago
I just want to know if my answer is correct
nataly862011 [7]

Answer:

The correct answer is letter "A": 20% of income.

Explanation:

The percentage of savings of people will directly depend on their income. Employees earning the minimum wage are likely to use the most of their salary paying bills which will give them few to no opportunity for saving. On the other hand, executives with annual income above the average have more chances to save a good percentage of the money they receive monthly according to their expenses.

However, for a person who receives an average salary that allows covering expenditure and having some free money a bank account, at least should be saving 20% of that income. Besides, according to the 50/20/30 budget rule, <em>50% of the salary should be spent on needs, 30% on wants, and 20% on savings</em>.

3 0
3 years ago
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