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slava [35]
3 years ago
9

Question 4. The price of a bond with 4 years to maturity that pays interest of $12 each half-year is $106. What is the current y

ield, the capital gains yield and the yield to maturity of this bond
Business
1 answer:
n200080 [17]3 years ago
3 0

Answer:

Face value of bond = 100

Years of maturity = 4

Market value = 106

Coupon frequency = 2

Semi annual coupon = 12

1. Current yield = Semi-annual * Coupon frequency / Market value

Current yield = 12 * 2 / 106

Current yield = 0.2264150943396226

Current yield =  22.64%

2. YTM = 2*Rate(Years of maturity*Coupon frequency, Semi annual, - market value, FV, 0)

YTM = 2*Rate(4, 2, 12, -106, 100,0)

YTM = 0.2168

YTM = 21.68%

3. Capital yield = Current yield - YTM

Capital yield = 21.68% - 22.64%

Capital yield = -0.96%

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Par value is the dollar value that an investor must pay in order to purchase preferred stock.
Vesnalui [34]
I would say false. the par value is not necessarily the amount that the investor must pay in order to purchase the preferred stock. the par value is known to be the market price of the stock however, investors may offer the stock above or below the par value depending on the decision of the board
4 0
3 years ago
The United Kingdom currently has a trade deficit with New Zealand. If the U.K. pound sterling appreciates relative to the New Ze
monitta

The correct answer to the given question is that the trade deficit would increase since with the appreciating pound means <em>more goods will be imported</em> from New Zealand.

Based on the given question, we are asked to show the effects of the trade deficit between New Zealand and UK based on the appreciation of the pound sterling relative to the New Zealand dollar.

With this in mind, we are aware that when there is a strong domestic currency, then it would encourage more imports and hamper exports, therefore, the trade deficit will increase, since an appreciating pound means more goods will be imported from New Zealand.

Therefore, the correct answer is option D

Read more about trade deficit here:

brainly.com/question/24473707

4 0
2 years ago
If a currency such as the​ US$ is traded in a competitive​ market, a(n)​ ________ in demand for the​ US$ ________ the price of t
Lerok [7]

Answer:

If a currency such as the​ US$ is traded in a competitive​ market, a(n)​ increase in demand for the​ US$ raises the price of the​ US$ in terms of another currency such as the Japanese Yen ​(yen​).

Explanation:

Basic offer and demand law.

5 0
3 years ago
What is the purpose of the color coded tape located at the front entrance of
irina1246 [14]

Answer:

D. None of the above

Explanation:

The color-coded tape are used at the front entrance of  Dollar General stores is a way to attract the customers in the store.

The color-coded tape attracts customers and shows the safety information to customers directly at the point.

Hence, the correct option is "D. None of the above".

8 0
3 years ago
Yoshi operates a shoe store as a sole proprietorship. However, he is in poor health and may be unable to continue running the bu
Shalnov [3]

Answer:

A. ceases to exist unless sold or taken over by Yoshi's heirs. 

Explanation:

A sole proprietorship is a from of business which is owned by one person. The owner is usually the decision maker.

One of the disadvantages of sole proprietorship is lack of continuity. The business usually ends when the owner dies. Although , family members can take over running the business.

I hope my answer helps you.

6 0
3 years ago
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