1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
mel-nik [20]
3 years ago
11

Both Bond Sam and Bond Dave have 7.3 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has three

years to maturity, whereas Bond Dave has 20 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave
Business
1 answer:
Ainat [17]3 years ago
4 0

Answer:

-5.14 for sam

-18.01% for dave

Explanation:

We first calculate for Sam

R = 7.3%

We have 2% increase

= 9.3%

We calculate for present value of coupon and present value at maturity using the formula for present value in the attachment

To get C

1000 x 0.073/2

= 36.5

time= 3 years x 2 times payment = 6

Ytm = rate = 9.3%/2 = 0.0465

Putting values into the formula

36.5[1-(1+0.0465)^-6/0.0465]

= 36.5(1-0.7613/0.0465)

36.5(0.2385/0.0465)

= 36.5 x 5.129

Present value of coupon = 187.20

We solve for maturity

M = 1000

T = 6 months

R = 0.0465

1000/(1+0.0465)⁶

= 1000/1.3135

Present value = 761.32

We add up the value of present value at maturity and that at coupon

761.32 + 187.20

= $948.52

Change in % = 948.52/1000 - 1

= -0.05148

= -5.14 for sam

We calculate for Dave

He has 20 years and payment is two times yearly

= 20x2 = 40

36.5 [1-(1+0.0465)^-40/0.0465]

Present value = 36.5 x 18.014

= 657.511

At maturity,

Present value = 1000/(1+0.0465)⁴⁰

= 1000/6.1598

= 162.34

We add up these present values

= 657.511+162.34 = $819.851

Change = 819.851/1000 -1

= -0.1801

= -18.01%

You might be interested in
g Your savings account earns 1.72% interest. You have $3,000 left over from an internship that you will put into the saving acco
bekas [8.4K]

Answer:

It will take 13 years and 66 days

Explanation:

Giving the following information:

Your savings account earns 1.72% interest.

Present value= $3,000

Final value= $3,756

To calculate the number of years, we need to use the following formula:

n= ln(FV/PV) / ln(1+i)

n= ln(3,756/3,000) / ln(1.0172)

n= 13.18 years

To be more specific= 365*0.18= 66

It will take 13 years and 66 days

4 0
3 years ago
In the management hierarchy _____ includes managers who set the overall direction of a firm, articulating a vision, establishing
ValentinkaMS [17]

Answer:

The correct answer is D) Top management

Explanation:

Top management, as the name implies, consists of those who are at the highest point in the management hierarchy. The most common positions that are part of top managament are, Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Strategist Officer (CSO). They are usually part of the Board of Directors, which answers to the shareholders.

Their task is, as the question specifies, to define the general policy of the company, including goals and strategies to achieve those goals. In a way, companies are just like nations, they have top executives like the president or the president of the senate, who define the direction in which the company/country will go.

7 0
3 years ago
Does anybody know this please help !?
levacccp [35]

Answer:

11. building codes

12. Consideration

13. Consumer Protection

14. Federal Unemployment Tax Act

15.  Zoning laws

Explanation:

do you need help with 16 and 18? if you do please comment!! but hope i helped <3

6 0
3 years ago
Bill Builder entered into a contract with Carl's Carpets to supply him with the carpeting he needed to complete the renovation o
pshichka [43]

Answer:

consequential damages

Explanation:

According to my research on different types of law suits, I can say that based on the information provided within the question Bill can recover the 900 he lost from Carl as consequential damages. These are damages have happened because of one party's failure to meet a certain deadline or contractual obligation and can be proven in court. Therefore since Bill can prove that he lost the 900 because of Carl's negligence he will most likely win that case.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

5 0
3 years ago
2. Sally Medavoy will invest $8,000 a year for 3 years in a fund that will earn 10% annual interest. If the first payment into t
ipn [44]

Answer: $10,746

Explanation:

Using Compound interest formula

A= p(1+r/n) *nt

A= final amount =?

P= initial principal =$8, 000

r = interest rate = 0.1

n= nob of times interest applied(3)

t=nob of times period elapsed (3)

A = 8,000 (1+0.1/3) *9

A = 8000 (3+0.1/3) *9

A= 8000 (3.1/3) *9

A = 8000 (1.0333) *9

A = 8000 × 1.34327

A= $10,746

5 0
3 years ago
Other questions:
  • A company's normal selling price for its product is $20 per unit. however, due to market competition, the selling price has fall
    14·1 answer
  • Mardist Corporation has sales of $100,000, variable expenses of $75,000, fixed expenses of $30,000, and a net loss of $5,000. Ho
    13·1 answer
  • You overhear a newly graduated RN telling one of your colleagues that leadership and management belong to the unit manager and n
    10·1 answer
  • When serving apple slices, its important to have which of the following ingredients on hand?
    9·2 answers
  • L Inc. has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beg
    5·1 answer
  • Bergeron is a local manufacturer of off-shore drilling platforms. In 2020, Bergeron entered into a contract to construct a drill
    5·1 answer
  • You can always withdraw the money you have contributed to a Roth IRA without paying taxes on the withdrawal because you have alr
    13·1 answer
  • At Bargain Electronics, it costs $29 per unit ($16 variable and $13 fixed) to make an MP3 player that normally sells for $51. A
    8·1 answer
  • Determine the starting current (LRC)
    8·1 answer
  • Describe a pricing decision your company has made. was it optimal? if not, why not? how would you adjust price? compute the prof
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!