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MrMuchimi
3 years ago
5

You buy a seven-year bond that has a 5.25% current yield and a 5.25% coupon (paid annually). In one year, promised yields to mat

urity have risen to 6.25%. What is your holding-period return
Business
1 answer:
Rufina [12.5K]3 years ago
5 0

Answer:

HPR = 0.371%

Explanation:

we must first determine the price of the bond in 1 year:

present value of face value = $1,000 / (1 + 6.25%)⁶ = $695.07

present value of coupon payments = $52.50 x 4.87894 (PV annuity factor, 6.25%, 6 periods) = $256.14

market price in 1 year = $951.21

since you bought the bond at face value (market value = YTM), the the holding period return is:

HPR = [(ending price - actual price) + dividends received] / actual price

HPR = [($951.21 - $1,000) + $52.50] / $1,000 = $3.71 / $1,000 = 0.371%

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3 years ago
Zeta, Inc., a calendar year taxpayer, suffers a casualty loss of $45,000. Zeta recovered insurance of $30,000. How much of the c
mezya [45]

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$15,000

Explanation:

Calculation to determine How much of the casualty loss will be a tax deduction to Zeta, Inc.

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Therefore the amount of the casualty loss that will be a tax deduction to Zeta, Inc. is $15,000

3 0
3 years ago
What is an opportunity cost
xxMikexx [17]

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B

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7 0
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If something happens to alter the quantity supplied at any given price, then.
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Change in supply lead to a shift in the supply curve either to the left or right.

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This change often makes the supply curve becomes steeper and flatter.

Therefore, Change in quantity supply will lead to a shift in supply curve either to right or left.

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2 years ago
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