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stira [4]
3 years ago
10

A bond has a Duration (not Modified) of 4.2 years and is priced at 99.50. Its yield is 3%. How much will its price change if the

yield increases to 3.3%? Use this data for the next 2 questions also.
Business
1 answer:
saw5 [17]3 years ago
4 0

Answer:

1.22%

Explanation:

The modified duration of the bond gives an indication of change in price due to a 1% change in the yield to maturity,hence, the bond modified duration is computed using the formula below:

modified duration=Macaulay Duration/(1+YTM)

Macaulay Duration=4.2

YTM(initial)=3%

modified duration=4.2/(1+3%)= 4.08  

That for 1% change in yield to maturity price would change 4.08%

0.3% change in yield(3.3%-3%)= 4.08%*0.3%=1.22%

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Luda [366]
<span>As a management representative in a transaction with a representative union, there would be the negative response if there were allegations of untruthfulness. As an arbitrator speaking to administration, activities to negate the allegations of lying by demonstrating the informed the entire certainties would demonstrate that administration is honest and legitimate. As an administration delegate in arrangements, searching out a bargain to wind up with a together advantageous determination where the representatives are upbeat and JBL Publishing Company will make progress is the thing that issues most.</span>
7 0
3 years ago
A firm can lease a truck for 4 years at a cost of $30,000 annually. It can instead buy a truck at a cost of $80,000, with annual
valina [46]

Answer:

Leasing.

Explanation:

Find the present value of each and compare and choose the one with the lowest cost in present value terms.

<u>LEASE;</u>

Payments are in form of an annuity ;done using financial calculator (TI BA II plus)

PMT = -30,000

N ;duration = 4

I/Y = 10%

FV = 0

then CPT PV = -$95,095.96

<u>BUY</u>

Initial cost; (already in present value terms) = -$80,000

Annual maintenance(is an annuity); done using financial calculator (TI BA II plus)

PMT = -10,000

N ;duration = 4

I/Y = 10%

FV = 0

then CPT PV = -$31,698.65

Add PV of salvage value;

PV = FV/ (1+r)^4

PV = 20,000 /(1.10^4)

= 20,000/ 1.4641

= $13,660.26911

Overall PV of BUYING = (-80,000 -31,698.65 + 13,660.26911) = -$98,038.38

Therefore, leasing is a better option since the overall present value of costs  is lower at $95,095.96 compared to that of buying at 98,038.38.

8 0
3 years ago
Which of the following is likely to cause a decrease in the equilibrium U.S. interest rate, other things being equal? a. an incr
garik1379 [7]

Answer:

The correct answer is d. pessimistic economic projections that cause businesses to reduce expansion plans.

Explanation:

Economic projections are quantitative studies which seek to describe how the growth of an economy will be in a certain period of time towards the future. These are based on existing economic models, in addition to historical reports, to identify patterns in which they know where the economy will go.

This information is of great interest to different sectors, for example, investors will always be interested in knowing which sectors of the industry will grow in the future, to invest in shares of leading companies in that area; people are always eager to know how the economy will be, in order to decide if it is good time to spend or save; Well, governments can do these studies to find out if it is necessary to implement any program to prevent economic problems.

5 0
3 years ago
If $360 is invested at an interest rate of 4% per year and is compounded quarterly, how much will the investment be worth in 18
podryga [215]

The worth of investment in 18 years will be $1,096.96 after adding $736.96 of the interest amount compounded quarterly.

Computation:

Given,

P Principal amount =$360

r Interest rate =4%

t Time period =18 years

The formula used to determine the compound interest amount is:

A=P\times(1+r)^{n\times\;t}

Substituting the values in the formula:

\begin{aligned}A&=\$360\times(1+0.04)^{4\times18}\\&=\$360\times2.0471\\&=\$736.96\end{aligned}

Therefore, the correct answer for the worth of investment is $736.96.

To know more about compound interest, refer to the link:

brainly.com/question/25857212

5 0
2 years ago
Apakah maksud perniagaan berskala domestik​
dimulka [17.4K]

Answer:

what??????

Explanation:

8 0
3 years ago
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