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kherson [118]
3 years ago
5

Consider a bond with a coupon of 5.2 percent, eight years to maturity, and a current price of $1,053.10. Suppose the yield on th

e bond suddenly increases by 2 percent. a. Use duration to estimate the new price of the bond. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
Sindrei [870]3 years ago
7 0

$936.41 is the new price of the bond.

<u>Explanation:</u>

<u>New price of the bond after using the duration is calculated as follows:</u>

Purchase date = 01 june 2016, Maturity date = 01 june 2024, frequency = 1

Face value = $10000, Annual coupon rate = 5.20 percent, Yield to maturity = 6.40 percent,

NPER = 6.688257877

PMT = $52.00

New price of the bond = $936.41 ( rounded to two decimal places)

Note: I have used an excel formula so as to calculate the new price of the bond.

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Sheffield Corp. sold some of its plant assets during 2021. The original cost of the plant assets was $904000 and the accumulated
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Answer:

The correct answer is Option C.

Explanation:

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The items in the question only affect the first two. Under the net cash flows from operating activities, we need to subtract the gain realized from the disposal of the plant assets from net income, which is Sales proceed minus Net book value, i.e., $90,800 - ($904000- $843000) = $29,800.

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3 years ago
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This would increase the loans account and the deposit account by $100 respectively.

Explanation:

a) Data and Calculations:

Southwestern Mutual Bank

Balance Sheet

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Reserves             $150          Deposits                         $1,200

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3 years ago
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