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3 years ago

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

Business

1 answer:

My name is Ann [436]3 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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The country of Alaine produces 1,000 tons of corn during a year. It is valued at $500 per ton. A lobbyist for the corn industr

Debora [2.8K]

Answer:

D. Corn is not used in the production of other goods.

Explanation:

D is the only option that can be an argument for the total value of the corn produced to be included as corn for the same year in the GDP.

This is due to the fact that only the final production is recorded in the GDP, this means that no goods are registered that are going to be part of other productive processes (generally raw materials) since double accounting would be incurred.

If for example, corn were part of another productive process and this productive process begins next year, that part of the corn used to produce that good would be included in the GDP of the year in which the product will be produced (the one that corn is used in the production).

This means that the lobbyist can only rely on option D (include all the value of corn for the year in which it was produced) if in this country the corn is not part of another productive process.

5 0

3 years ago

1. Determine whether a $100,000, 3-month T-Bill selling at $97,645 or a 10%, semi-annual coupon bond selling at par has the grea

stiv31 [10]

The 10% semi-annual coupon bond selling at par has the greater effective annual return than the $100,000, 3-month T-Bill selling at $97,645.

<h3>Data and Calculations:</h3>

T-Bill:

Face value of T-Bill = $100,000

Present value of the T-Bill = $97,645

Effective yield rate = 9.65% ($2,355/$97,645 x 100 x 12/3)

Bond:

Face value of bond =$100,000

Interest = 10% semi-annual

Present value of the bond = $104,761.90

Effective yield rate = 9.80%

Thus, the 10% semi-annual coupon bond selling at par has the greater effective annual return than the $100,000, 3-month T-Bill selling at $97,645.

Learn more about Bonds and T-Bills at brainly.com/question/15394251

4 0

3 years ago

Write a paragraph (5-8 sentences) that compares and contrasts grants, scholarships, and loans. Be sure to include the pros and c

daser333 [38]

Answer:

he lets talk on here pls

Explanation:

8 0

3 years ago

Boston Lager is one of several beers produced by Boston Beer, which also produces Samuel Adams beer. Consider the events below t

kaheart [24]

Answer: Please refer to the explanation section

Explanation:

The question incomplete we are required to differentiate events that will shift the demand curve of Boston Lager to the left and events that will not shift the demand curve but the events are not provided in the question. however because it is clear what the question requires i will list Events that cause a shift in the demand curve and events that will not shift the demand curve.

events that will shift the demand curve of Boston Lager to the left

Decrease in the price of Beer produced by Samuel Adams (competitor).
Household income decrease
Government raising the Tax on alcohol

events that will NOT shift the demand curve of Boston Lager

Change in Price charge by Boston Lager. a change in the price of beer charged by Boston Lager will cause a Change in quantity of beers Demand which will be indicated by a movement along the demand curve but will not shift the demand curve

3 0

4 years ago

A firm uses a continuous review (Q) inventory system. Weekly demand for a product is normally distributed with a mean of 120 uni

Sidana [21]

Answer: 90.32%

Explanation:

Weekly demand (d) = 120

Standard deviation = 10

Lead time (l) = 4

Reorder point = 506

The reorder point is calculated as:

506 = 120 × 4 + Z × 10 × ✓4

Solving for Z will give us 1.3

Then, we check this in the z table which will give us p = 0.9032

Therefore, the service level is 90.32%.

8 0

3 years ago