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KonstantinChe [14]
4 years ago
12

vA $1,000 three-year par-value bond yields an effective annual interest rate of 6%. Coupons are paid on an annual basis at a rat

e of 5% per year. Determine the modified convexity of the bond
Business
1 answer:
AveGali [126]4 years ago
4 0

Answer:

10.00

Explanation:

We haven = 3

Pv = 1000

Rate if interest = 6%

Coupon = 5% x 1000

= 50

∆y = assumed to be 1%

The formula for convexity =

(V- + V+)-2Vo/Vo+(∆y)²

We first solve for Vo

Using the financial calculator

Vo = 973.26

Then we solve for V-

Pv = 1000

Pmt = 50

I = 5%

n = 3

V- = 1000

We solve for V+

I = 7%

Pmt = 50

N = 3

V+ = 947.51

Then the convexity is gotten by putting these values into the formula

= (1000+947.51)-2x973.26/973.26x(1%)²this is approximately

10

Please check attachment for more details

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For the most recent year, Camargo, Inc., had sales of $594,000, cost of goods sold of $255,330, depreciation expense of $67,900,
defon

Answer: 2.61 times

Explanation:

Times Interest ratio = Earnings before Interest and Tax / Interest

Earnings before Interest and tax = Sales - Cost of goods sold - Depreciation expenses

= 594,000 - 255,330 - 67,900

= $270,770

Net Income = Addition to retained earnings + Total dividends paid

Net income = 80,300 + ( 27,500 * 1.64)

= $125,400

Earnings before tax = Net Income/ ( 1 - T)

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= $167,200

Interest = Earnings before interest & tax (EBIT) - Earnings before tax (EBT)

= 270,770 - 167,200

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Times Interest ratio = 270,770 / 103,570

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5 0
4 years ago
It can be referred from the text that ...
Contact [7]

This question is incomplete because the text is missing; here is the missing part:

Text 1

1. Remove the back cover, using a small screwdriver to loosen the screw

2. Remove batteries and replace with two new AAA batteries. use the + and - signs to position correctly. dispose of used batteries properly.

3. Replace the cover and tighten the screw with the screwdriver

4. Reset the time using the side buttons

The GMX 200 is guaranteed to keep time accurately for one full year from date of purchase should it malfunction in any way during this time period, your money will be refunded in full.

The correct answer to this question is C. The users will get full refund if there is malfunction during the guarantee period.

Explanation:

This text provides instructions to change the battery in a GMX 200, which can be inferred it is a clock or similar device. This text explains the different steps users need to follow to change batteries. Moreover, in the last section of the text, it is clarified if there is any failure during the first year, which is the guaranteed time "your money will be refunded in full". According to this, it can be inferred during this time any malfunction implies the user gets a complete refund (option C.)

6 0
3 years ago
True or false: For financial analysis, financial statements and accounting numbers are more important than cash flows.
rusak2 [61]

Answer:

false

Explanation:

3 0
3 years ago
Ben & Jerry's mission to make the world a better place is linked to various organizational and marketing strategies, one of
iogann1982 [59]

Answer:

Caring dairy

Explanation:

Caring dairy strategy is based on the following principle.

They check if a cooperative guarantees the following:

1.  Supplies are hormone free

2. Bovine growth is hormone free

If they have a cooperative's guarantee then they buy milk and cream from that cooperative

In this way they are safe and can claim that their products are also hormone free

8 0
4 years ago
The Wood Valley Dairy makes cheese to supply to stores in its area. The dairy can make 344 pounds of cheese per day (359 days pe
djyliett [7]

Answer:

the minimum total annual cost is $3,372.58

Explanation:

<em>Step 1 Calculate the the Optimum Batch Size for Production run</em>

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<em>Step 2 Calculate the minimum total annual cost</em>

Total costs = Set up costs + Carrying Costs

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                   = $3,372.58

6 0
4 years ago
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