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grin007 [14]
3 years ago
6

Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years

to maturity, whereas Bond Dave has 18 years to maturity. If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Sam
Business
1 answer:
Natali5045456 [20]3 years ago
4 0

Answer: -12.1%

Explanation:

Bond Sam was priced at Par which means it could have been priced at $1,000 and its yield was the same as the coupon rate of 8%.

If interest rates rise by 5%, the yield becomes:

= 8% + 5%

= 13%

Price of bond is attached:

Yield = 13% /2 = 6.5% per semiannual period

Coupon = 8% * 1,000 * 0.5 = $40 per semi annual period

Period till maturity = 3 * 2 = 6 semiannual periods

Price = $878.97

Percentage change in price:

= (878.97 - 1,000) / 1,000 * 100%

= -12.1%

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Answer: d. The production activities in the first stage and the unit of product in the second stage

Explanation:

Activity based Costing is primarily a method of assigning indirect costs like administrative expenses to the goods and services manufactured by a company by basing it on the activities of the company.

With Activity Based Costing, the company aims to figure out how much these aforementioned activities cost first and then calculating the cost per unit in the second stage by assigning cost per level of activity.

7 0
3 years ago
Winsted Co. purchased a bond on December 1 of the current year for $ 49 comma 000 and classified the investment as trading. The
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Answer:

Net income = $3000

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4 0
3 years ago
Mark tells Leslie that his stereo has quadraphonic speakers because he was told that when he bought it. Leslie buys the stereo,
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Yes, because the statement was false.

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When a good is being sold there are certain assertions which the seller must stand behind.

In this scenario Mark tells Leslie that his stereo has quadraphonic speakers because he was told that when he bought it.

The fact that the stereo did not have quadrophinic speakers should have been discovered and stated by Mark. The misinformation he got when buying the stereo does not clear him of breach of warranty

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3 years ago
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Lean more about types of debt at brainly.com/question/2754850

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