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Shalnov [3]
3 years ago
12

You enter into a forward contract to buy a 10-year, zero coupon bond that will be issued in one year. The face value of the bond

is $1000 and the one-year and 11-year spot interest rates are 5 and 7 percent respectively. What is the forward price of your contract
Business
1 answer:
weqwewe [10]3 years ago
5 0

Answer:

$498.94

Explanation:

1 year interest rate = 5%

11 year interest rate = 7%

10 year spot interest rate at end of 1 year = [{(1+0.07)^11 / (1+0.05)}^(0.1) - 1]

10 year spot interest rate at end of 1 year = [(2.104852/1.05)^0.1] - 1

10 year spot interest rate at end of 1 year = 1.07202083615 - 1

10 year spot interest rate at end of 1 year = 0.072021

10 year spot interest rate at end of 1 year = 7.202%

Face value = $1,000

Forward Price of contract = $1000/(1+0.0720)^10

Forward Price of contract = $1000/2.00423136

Forward Price of contract = 498.944392915

Forward Price of contract = $498.94

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Financial Statements of a Manufacturing Firm The following events took place for Rushmore Biking Inc. during February, the first
Katyanochek1 [597]

Answer:

Required a.

<u>Rushmore Biking Inc. </u>

<u>Income Statement For the Month Ended February 28 </u>

Sales Revenue                                       $1,033,500

Less Cost of Sales                                  ($577,400)

Gross Profit                                               $456,100

Less Expenses :

Selling expenses                 $248,300

Administrative expenses      $92,400  ($340,700)

Net Income/(Loss)                                    $115,400

Required b.

Materials inventory, February 28  is $41,000

Work in process inventory, February 28 is $24,800

Finished goods inventory, February 28 is $17,100

Explanation:

First, Calculate the Costs of Goods Manufactured, then the Income Statement

Manufacturing Costs Schedule

Direct Materials                                                  $252,100

Direct labor                                                         $216,000

Overheads ($216,000 × 70%)                            $151,200

Total Manufacturing Costs                                $619,300

Less Transfer to Finished Goods                   ($594,500)

Closing Work In Process Inventory                   $24,800

Raw Materials T - Account

Debit :

Purchases                                                          $293,100

Totals                                                                 $293,100

Credit :

Transfer to Work In Process                            $252,100

Ending Balance                                                   $41,000

Totals                                                                 $293,100

Finished Goods T - Account

Debit :

Transfer from Work In Process                       $594,500

Total                                                                 $594,500

Credit :

Trading Account                                              $577,400

Ending Balance                                                   $17,100

Total                                                                 $594,500

5 0
3 years ago
At the adjourning stage of team development, the team members are most likely to:________
spayn [35]

Answer:

d. disband permanently or take a temporary break.

Explanation:

Adjournment stage is the fifth and last stage of group development. The group wraps up work and is disbanded. At this stage team members celebrate their successes and get closure in preparation for the next project.

Team members may feel low motivation and a sense of loss because of bonds they had formed. Some people refer to this stage as the mourning stage, and team members need to celebrate their achievements to boost moral.

4 0
3 years ago
Read 2 more answers
A sporting goods store is having a large sale event. Baseball bats are marked down by 42%, and hockey sticks are marked down by
Rina8888 [55]

The correct statement is   "Hockey sticks had their prices reduced by $0. 41 more than baseball bats."

Mark down refers to a reduction in price of an item or good. The reduction is generally done as a percentage of price of the item. The purpose behind mark down is to increase sales volume.

<h3>Calculation of reduction in price:</h3>

Given:

Markdown in price of baseball bats is 42%

Cost of baseball bats after markdown is $21.46

Markdown in price of hockey sticks is 29%

Cost of hockey sticks after markdown is $39.05

For calculating the amount of markdown, we need to find the original cost of baseball bats and hockey sticks.

Calculation of cost of baseball bats before markdown:

\begin{aligned} \rm Cost \:before\:markdown &= \dfrac{\rm Cost \:after \:Markdown}{100- \rm Markdown\%} \\&#10;\\&#10;&=\dfrac{21.46}{100-42\%}\\&#10;\\&#10;&=\dfrac{21.46}{58\%}\\&#10;\\&#10;&=\$37\end

Hence the markdown in price of baseball bats is \$37-\$21.46=\$15.54

Similarly, for hockey sticks:

\begin{aligned} \rm Cost \:before\:markdown &= \dfrac{\rm Cost \:after \:Markdown}{100- \rm Markdown\%} \\\\&=\dfrac{39.05}{100-29\%}\\\\&=\dfrac{39.05}{71\%}\\\\&=\$55\end

Markdown in the cost of hockey sticks is \$55-\$39.05=\$15.95.

Difference in markdown is:

\$15.95-\$15.54=\$0.41

Therefore it can be concluded that markdown in cost of hockey sticks is more as compared to baseball bats by $0.41

Hence the correct statement is "Hockey sticks had their prices reduced by $0. 41 more than baseball bats."

Learn more about markdown here:

brainly.com/question/3099549

7 0
2 years ago
Which mission area includes restoring health and social services networks and returning economic and business activities to a he
Bezzdna [24]

Answer:

The correct answer is letter "A": recovery.

Explanation:

The U.S. Federal Emergency Aid (<em>FEMA</em>) is an agency that aims to provide the necessary support needed in front of major events and natural disasters. The FEMA has five (5) mission areas: <em>prevention, protection, mitigation, response, </em>and <em>recovery</em>. FEMA's recovery mission is to put back on track communities affected by incidents. FEMA's core capabilities include planning,  health and social services, infrastructure systems and economic recovery.

8 0
3 years ago
Can we chat I am bored I had instagram too​
Otrada [13]

Answer:

well l'm not on instagram

4 0
2 years ago
Read 2 more answers
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