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
serg [7]
2 years ago
10

A bond has a face value of $1,000, a coupon of 4% paid annually, a maturity of 30 years, and a yield to maturity of 7%. What rat

e of return will be earned by an investor who purchases the bond for $627.73 and holds it for 1 year if the bond’s yield to maturity at the end of the year is 8%?
Business
1 answer:
Lelechka [254]2 years ago
4 0

Answer:

-11.8%

Explanation:

the key to answer this question is to remember that valuation of a bond depends basically of calculating the present value of a series of cash flows, so let´s think about a bond as if you were a lender so you will get interest by the money you lend (coupon) and at the end of n years you will get back the money you lend at the beginnin (principal), so applying math we have the bond value given by:

price=\frac{principal*coupon}{(1+i)^{1} }+ \frac{principal*coupon}{(1+i)^{2} } \frac{principal*coupon}{(1+i)^{3} }+...+\frac{principal+principal*coupon}{(1+i)^{n} }

so in this particular case that one year later there are 29 years to maturity so we have:

price=\frac{1,000*0.04}{(1+0.08)^{1} }+ \frac{1,000*0.04}{(1+0.08)^{2} } \frac{1000*0.04}{(1+0.08)^{3} }+...+\frac{1,000+1,000*0.04}{(1+0.08)^{30} }

price=553.6638

so as we have a higher rate the investment has the next return:

return=\frac{553.66}{627.73} -1

return=-11.8\%

You might be interested in
Laura smiles as her employees file into the meeting room of the small vet clinic for their weekly staff meeting. Laura has owned
zaharov [31]

Answer:

Adjourning

Explanation:

The adjourning is the stage where the team would be disperse when the project is finished

As in the given situation, since Laura's team has completed the project and they are moved to the other responsibilities

So as per the given situation, the team development represent the adjourning stage

hence, the same is relevant and considered too.

5 0
3 years ago
WHO IS THIS ECHO PERSON? LIKE WHY ARE YOU GETTING RID OF MY STUFF??
Harman [31]

Answer:

no c

Explanation:

6 0
3 years ago
Read 2 more answers
A(n) ________ is defined as a business that is independently owned and operated and is not dominant in its field of operations.​
Wittaler [7]
A Small business is defined as a business that is independently owned and operated and is not dominant in its field of operations.
7 0
3 years ago
When the market for standalone Global Positioning System (GPS) devices declined with the arrival of GPS-enabled mobile phones, M
Ymorist [56]
Consolidation strategy

(Im not 100% sure)
4 0
3 years ago
When an employee comes late to the office, an internal attribution will occur if there is low _____, low ______ and high _____.
coldgirl [10]

Answer:

B. consensus; distinctiveness; consistency.

Explanation:

Internal attribution: It is the case of human behavior that causes the attribution, such as ability, skills, personality, etc. it is also known as dispositional attribution. In this case, individual does not blame external factor or attribution, instead, they use an internal cause for their behavior.

In the given case, the employee comes late to the office, he will use internal attribution for his behavior if there is low consensus, low distinctiveness of other factors  and high consistency of getting late.

3 0
2 years ago
Other questions:
  • Of the approaches to pursuing international markets, developing a ________ involves the greatest commitment and risk. joint vent
    6·1 answer
  • Nicolas maduro is the leader of what country, which is struggling with a major economic crisis that includes incredibly high inf
    6·1 answer
  • Rey Company’s single product sells at a price of $216 per unit. Data for its single product for its first year of operations fol
    10·1 answer
  • Brief Exercise 7-07 Grouper Family Importers sold goods to Tung Decorators for $33,600 on November 1, 2020, accepting Tung’s $33
    6·1 answer
  • Skysong, Inc. took a physical inventory on December 31 and determined that goods costing $235,000 were on hand. Not included in
    13·1 answer
  • What is the formula for measuring the price elasticity of supply? Percentage change in quantity demanded/percentage change in in
    13·1 answer
  • Mandy Feng employs Jay Johnson at a salary of $35,000 a year. Feng is subject to employer Social Security taxes at a rate of 6.2
    10·1 answer
  • At age 55, Ellen separated from service with her former employer. She rolled over $19,000, the entire balance of her 401(k), int
    10·1 answer
  • How much is one bottle of water? Case of 20 water bottles for $15.00
    8·2 answers
  • Ruddick Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just comp
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!