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Andrew [12]
3 years ago
11

What is the expected rate of return on a bond that pays a coupon rate of 9% paid semi - annually, has a par value of $1,000, mat

ures in five years, and is currently selling for $1071? a. 8.40% b. 7.28% c. 3.64% d. 4.21%
Business
1 answer:
spayn [35]3 years ago
8 0

Answer:

b. 7.28%

Explanation:

This question is asking for the yield to maturity(YTM) of the bond. You can solve this using a financial calculator with the inputs below. Additionally, adjust the coupon payment(PMT) and time to maturity(N) to semiannual basis.

Time to maturity; N = 5*2 = 10

Face value; FV = 1000

Price of bond; PV = -1071

Semiannual coupon payment; PMT = (9%/2) *1000 = 45

then compute semiannual interest rate; CPT I/Y = 3.64%

Next, convert the semiannual rate to annual rate(YTM) = 3.64% *2

YTM = 7.28%

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Answer:

$46.51

Explanation:

The weighted arithmetic mean can be defined as:

M = \frac{n1P1 + n2P2 +n3P3}{n1 +n2+n3}

Where n is the number of shares and P is the share price, then:

M= \frac{50*104 + 100*25.25+ 20*9.125}{50+100+20} \\ M= \frac{7907.5}{170}\\M= 46.514

Based on this, the weighted arithmetic mean price per share is $46.51

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I think that it might be D
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A marketing specialist needed to find a new way of marketing the company's main product to its potential clients. While watching
fenix001 [56]

According to the creative process model, <u>verification</u> is the next stage in the creative process after such inspiration.

<u>Option: C</u>

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3 years ago
Determinants of Interest Rate for Individual Securities The Wall Street Journal reports that the rate on 3-year Treasury securit
egoroff_w [7]

Answer:

20%

Explanation:

Calculation for What is the maturity risk premium on the 6-year Treasury security

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3 years ago
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