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2 years ago

Which of the following is true about duration and modified duration?

Business

1 answer:

My name is Ann [436]2 years ago

4 0

Answer:

The truth about Macaulay Duration and Modified Duration is:

d. All are true.

Explanation:

Principally, the Macaulay Duration, used mainly with immunization strategies, measures the weighted average time an investor holds a bond until the period when the present value of the bond’s cash flows equals to the initial bond amount.

On the other hand, the Modified Duration, providing a risk measure by being sensitive to interest rates, identifies the amount by which the duration changes for each percentage change in the yield and, at the same time, measures how the amount of a change in the interest rates impacts a bond's price.

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OneChicago has just introduced a single-stock futures contract on Brandex stock, a company that currently pays no dividends. Eac

-Dominant- [34]

Answer: 299750

Explanation:

Based on no-arbitrage approach, future price should be equal to spot price compounded by risk-free rate.

Spot price = $110

Risk-free rate = 9%

Future price = 110*(1+9%) = 119.9

For 2500 shares = 119.9*2500 = 299750

3 0

3 years ago

Ollie Company experienced the following events during its first-year operations: 1. Acquired $72,000 cash from the issue of comm

SCORPION-xisa [38]

Answer and Explanation:

The preparation of the statement of changes in stockholders' equity is presented below:

Ollie Company

Statement of changes in stockholders' equity

Beginning common stock $0

Add: Common stock issuance $72,000

Ending common stock $72,000

Beginning retained earning $0

Add: Net income $16,000 ($59,000 - $43,000)

Less: cash Dividend paid -$7,000

Ending retained earning $9,000

Total stockholder equity $81,000 ($72,000 + $9,000)

4 0

3 years ago

Ethan started a website. After a few months, a publishing company filed a lawsuit against his company for copyright infringement

Marianna [84]

Answer:

The correct answer is letter "B": A proprietorship.

Explanation:

Sole proprietorships are businesses with a single owner who is responsible for all the operations. The advantage of this type of business is that they are not strictly regulated by the government and are easy to form but the owner has full liability which implies if the business falls into debt, the personal assets of the owner can be considered to repay that debt.

4 0

3 years ago

You just won the lottery, which promises you $200,000 per year for the next 20 years. You receive the first payment today (hint:

dsp73

Answer:

The present value of your winnings is <u>$1,959,555.65</u>.

Explanation:

Since this is an annuity due as already hinted in the question, the formula for calculating the present value (PV) of an annuity is used as follows:

PV = P × [{1 - [1 ÷ (1 + r)]^n} ÷ r] × (1 + r) .................................. (1)

Where ;

PV = Present value of winnings =?

P = Annual payment = $200,000

r = interest rate = 9.25%, or 0.0925

n = number of years = 20

Substituting the values into equation (1) above, we have:

PV = $200,000 × [{1 - [1 ÷ (1 + 0.0925)]^20} ÷ 0.0925] × (1 + 0.0925)

PV = 200,000 ×8.96821807613347 × 1.0925

PV = $1,959,555.65

Therefore, the present value of your winnings is <u>$1,959,555.65</u>.

8 0

3 years ago

A group of customers that a business decides to focus its marketing efforts and, ultimately, its products on is a _____. target

SVEN [57.7K]

Answer:

Target market!!

Explanation:

Hope this helps:)

8 0

1 year ago