Answer:
The yield to maturity is 6.45%.
Explanation:
Yield to Maturity (YTM) is the long term yield on the bond based on the assumption that the bond is held till maturity. The Yield to Maturity is calculated using the formula as shown in the attachment,
The coupon payment on bonds is = 1000 * 0.07 = 70
YTM = ( 70 + (1000 - 1038.5)/9 ) / ((1000 + 1038.5) / 2)
YTM = 0.06448 or 6.448% rounded off to 6.45%
Answer:
1% negative
Explanation:
<u>a. What is the real interest rate?</u>
the inflation premium is an added value to the real interest rate to cover the effect of inflation and be more attractive to potential investor:
real interest rate + inflation premium = nominal interest rate
real interest rate + 2% = 1%
we clear real interest:
real interes rate = 1% - 2% = -1%
The real interest is 1% negative
Answer:
<u>Reffeal</u>
Explanation:
A letter of reference is an effective method for establishing clear communication with information needed to clarify possible doubts and bring credibility. It should be written in a formal manner, highlighting the strengths of the message to be conveyed beyond clear, accurate and honest language.
