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allochka39001 [22]
3 years ago
12

The one-year interest rate over the next three years is expected to be 3.00%, 5.00% 8.00%. The liquidity premium for one- to thr

ee-year bonds: 0%, 0.25%, 0.75%. What is the interest rate on the three year bond?
Business
1 answer:
DENIUS [597]3 years ago
6 0

Answer:

6%

Explanation:

An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited or borrowed. The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited or borrowed.

Solution

interest rate on 3-year bond

Interest rate = [{(1 + 3%) × (1 + 5%) × (1 + 8%)} ^ (1 / 3) - 1] + 0.75%

Interest rate = [(1.16802 ^ 0.33) - 1] + 0.75%

Interest rate = (1.0525- 1) + 0.75%

Interest rate = 0.0525 + 0.0075%

Interest rate = 0.06 OR 6%

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Answer:

Explanation:

1. Only product A is produced

40 hours= 40*60*60 = 144,000 seconds

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Run time to produce one batch of A = 1000*75sec = 75,000 seconds

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2. Only product B is produced

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To produce one batch of A = 500*45sec = 22,500 seconds

Setup time = 6 hours = 6*7200 seconds= 43,200sec

Remaining seconds = 144,000-(22,500+43,200) = 78,300 seconds

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Total Product A manufactured are = 500+1740= 2240 units

3. A and B are produced in a mix of 25% A and 75% B?

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A is manufactured for = 25% of 37 hours = 9.25 hours = 33300 hours

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