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3 years ago

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If on November 26,2017, The Dow Jones industrial average closed at 12,743.40, which was down 237.44 that day. what was the retur

n (in percent) of stock market that day?

1 answer:

n200080 [17]3 years ago

7 0

Answer:

-1.83%

Explanation:

The closing price was 12,743.40, which was down by .

it means that the opening price was

$12,743.40 + $237.44 = $12,980.44.

The percentage return will be the

return/ original price x 100

=- - 237.44/12,980.44 x 100

= - 0.018291574 x 100

= - 1.83%

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Success in today's dynamic business environment depends heavily on maximizing the use of Internet-based technologies and Web-ena

MariettaO [177]

Answer:

to meet the competitive requirements of customers, suppliers and business partners.

Explanation:

The world is slowly drifting towards a global age and we all need internet based technologies to keep up. The suppliers need the technologies to advertise their goods and keep up with customer demands and satisfaction. The customers need it to be able to find things they want and also get in touch with their favourite suppliers. The business partners need it to know the in and out of their investment and keep abreast of the business track.

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3 years ago

Florence deposited ₱ 14,800 in a bank that gives 4.35% simple interest. after 2years 4months, she went back to the bank to check

Nadusha1986 [10]

Answer:

₱ 16,300.054

Explanation:

The formula for calculating simple interest is as below.

I= p x r x t

In this case, p= 14,800, r = 4.35% and t is 2 years and 4 months

the interest rate is in years; we need to convert two years and four months to years.

=4 months = 4/12 of one year = 0.33

2 years 4 months = 2.33 year

I= 14,800 x 4.35/100 x 2.33

I= 14,800 x 0.0435 x 2.33

I=1,500.054

the amount in the bank will be principal plus interest

=14,800 + 1500

=16,300.054

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3 years ago

We observe the following annualized yields on four Treasury securities: (75%)

Anon25 [30]

Answer:

Explanation:

1.

From the given information;

The spot rate for maturity at 0.5 year $(X_1) = 4\%/2 = 2\%$

The spot rate for maturity at 1 year is:

= $\dfrac{22.5}{(1+X_1)}+ \dfrac{1000 + 22.5}{(1+X_2)^2}=1000$

= $\dfrac{22.5}{(1+0.02)}+ \dfrac{1000 + 22.5}{(1+X_2)^2}=1000$

= $\dfrac{22.5}{(1+0.02)}+ \dfrac{1022.5}{(1+X_2)^2}=1000$

By solving for $X_2$ ;

$X_2$ = 2.253%

The spot rate for maturity at 1.5 years is:

$= \dfrac{25}{(1+X_1)}+ \dfrac{25}{(1+X_2)^2}+ \dfrac{1000 + 25}{(1+X_3)^3}=1000$

Solving for $X_3$

$X_3$ = 2.510%

The spot rate for maturity at 2 years is:

$= \dfrac{27.5}{(1+X_1)}+ \dfrac{27.5}{(1+X_2)^2}+ \dfrac{27.5}{(1+X_3)^3} +\dfrac{1000+27.5}{(1+X_4)^4} =1000$

By solving for $X_4$ ;

$X_4$ = 2.770%

Recall that:

Coupon rate = yield to maturity for par bond.

Thus, the annual coupon rates are 4%, 4.5%, 5%, and 5.5% for 0.5, 1, 1.5, 2 years respectively.

2.

For n years, the price of n-bond is:

$= \dfrac{cash \ flow \ at \ year \ 1}{1+X_1}+ \dfrac{cash \ flow \ at \ year \ 2}{(1+X_2)^2}+... + \dfrac{cash \ flow \ at \ year \ b}{(1+X_n)^n}$

Thus, for 2 years bond implies 4 periods;

∴

$= \dfrac{40}{1+0.02}+ \dfrac{40}{(1+0.02253)^2} + \dfrac{40}{(1+0.0252)^3}+ \dfrac{40}{(1+0.0277)^4}$

= $1047.024

3.

Suppose there exist no-arbitrage, then the price is:

$= \dfrac{0}{(1+0.02)}+\dfrac{1000}{(1+0.02253)^2}$

= 956.4183

Since the market price < arbitrage price.

We then consider 0.5, 1-year bonds from the portfolio

Now;

weight 2 × 1000 + weight 2 × 22.5 = 1000

weight 2 × 1022.5 = 1000

weight 2 = 1022.5/1000

weight 2 = 0.976

weight 1 + weight 2 = 1

weight 1 = 1 - weight 2

weight 1 = 1 - 0.976

weight 1 = 0.022

The price of a 0.5-year bond will be:

$= \dfrac{1000}{(1+0.02\%)} \\ \\ =\mathbf{980.39}$

The price of a 1-year bond will be = 1000

Market value on the bond portfolio = 0.022 × price of 0.5 bond + 0.978 × price 1-year bond = 956.42

= 0.022 × 980.39 + 0.978 × 1000

= 956.42

So, to have arbitrage profit, the investor needs to purchase 1 unit of the 1-year zero-coupon bond as well as 0.022 units of the 0.5-year bond. Then sell 0.978 unit of the 1-year bond.

Then will he be able to have an arbitrage profit of $56.42

4.

The one-period ahead forward rates can be computed as follows:

Foward rate from 0 to 0.5 $X_1$ = 2%

Foward rate from 0.5 to 1

$(1+X_2)^2 = (1+X_1) \times (1+ Foward \ rate \ from \ 0.5 \ to \ 1 )$

$(1+0.0225)^2 = (1+0.02) \times (1+ Foward \ rate \ from \ 0.5 \ to \ 1 )$

Foward rate from 0.5 to 1 = 2.5%

Foward rate from 1 to 1.5

$(1+X_3)^3 = (1+X_2)^2 \times (1+ Foward \ rate \ from \ 1 \ to \ 1.5 )$

$(1+0.0251)^3 = (1+0.0225)^3 \times (1+ Foward \ rate \ from \ 1 \ to \ 1.5 )$

Foward rate from 1 to 1.5 =3.021%

Foward rate from 1.5 to 2

$(1+X_4)^4 = (1+X_3)^3 \times (1+ Foward \ rate \ from \ 1.5 \ to \ 2 )$

$(1+0.0277)^4 = (1+0.0251)^3 \times (1+ Foward \ rate \ from \ 1.5 \ to \ 2 )$

Foward rate from 1.5 to 2 =3.021%

5.

The expected price of the bond if the hypothesis hold :

= $\dfrac{40}{1+ 0.03021}+ \dfrac{1000+40}{(1+0.03285)^2}$

$= \dfrac{40}{(1.03021)}+ \dfrac{1040}{(1.03285)^2}}$

= 1013.724254

= 1013.72

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