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EastWind [94]
3 years ago
13

Calculate the modified duration for a 10-year, 12 percent coupon rate, and semi-annual coupon payment bond with a yield to matur

ity of 10 percent and a Macaulay duration of 7.2 years.
Business
1 answer:
Andru [333]3 years ago
8 0

Answer:

Missing question "<em>If the interest rates increase by 50 basis points, What will be the percent change in price for the bond? Why? "</em>

Modified Duration = Macaulay Duration / (1 + YTM)

Modified Duration = 7.2 / (1 + 10%)

Modified Duration = 7.2 / (1 + 10%)

Modified Duration = 6.55

% Change in Bond Price = - Modified Duration x Change in int rates

% Change in Bond Price = - 6.55 x 0.5%

% Change in Bond Price = - 3.27%

Thus, the Interest rates and bond prices are inversely related. Hence, increase in interest rates would lead to decline in bond prices.

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KengaRu [80]

Answer: Informational

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     In the given case, Julia tries to collect all the relevant information from different sources such as staff meetings. She collected all the information with objective of making the product suitable for customer needs and preferences.

Thus, we can conclude that Julia likes to play informational role.

7 0
3 years ago
According to the conceptual framework, the objectives of financial reporting for business enterprises are based on.
poizon [28]

Financial reporting objectives for companies, according to the conceptual framework, are based on user needs, to be used as a periodic assessment of organizational performance.

<h3 /><h3>Financial reports</h3>

Responsible for supporting organizational decision-making, their objective is to analyze, monitor and report the performance of an organization, to determine the financial health of the business, demonstrate transparency and assist in the decision-making process.

Therefore, financial reporting objectives are based on user needs, ie a company uses such reports to measure performance, determine projections, analyze resource utilization and make more effective decisions.

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3 0
2 years ago
Which example envolves a real world restriction that can affect your decision making process?
lbvjy [14]
I think the answer is family disputes
7 0
3 years ago
Tide Corporation has traditionally made a subcomponent of its major product. Annual production of 30,000 subcomponents results i
poizon [28]

An amount of $24 per unit will need to be charged by the outside supplier to make Tide be indifferent between making or buying the subcomponent.

Relevant cost per unit to make = (Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead) / Total sub-component unit

Relevant cost per unit to make = ($250,000 + $200,000 + $190,000 + $80,000) / 30,000 units

Relevant cost per unit to make = $24

Hence, the  indifferent price is $24 per unit

Therefore, an amount of $24 per unit will need to be charged by the outside supplier to make Tide be indifferent between making or buying the sub-component.

Read more about  indifferent price:

<em>brainly.com/question/24516871</em>

8 0
2 years ago
Luca's parents set firm rules but are responsive to his needs. They give him a chance to explain himself and also explain their
Zina [86]

Answer:

This is a typical super-protective parenting style. In my opinion this parent´s behavior is not positive and is out  of use. Nowadays parents try to talk more, explain dangerous to teens and give them some freedom to have a good time with friends.

Explanation:

6 0
3 years ago
Read 2 more answers
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