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Alex Ar [27]
3 years ago
7

A bond that pays interest semiannually has a coupon rate of 5.08 percent and a current yield of 5.37 percent. The par value is $

1,000. What is the bond's price
Business
1 answer:
Zolol [24]3 years ago
4 0

Answer:

$997

Explanation:

The price of the Bond is its Present Value. thus we need to discount the future cash flows (payments and capital repayments) to find the price as follows.

<em>Note : I am using a financial calculator here</em>

FV = $1,000

P/Yr = 2

N = 1 x 2 = 2

PMT = ($1,000 x 5.08 %) ÷ 2 = $25.40

YTM =  5.37 %

PV = ?

Conclusion

Assuming the Bond Matures in 1 year, the bond's price is $997

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Calculate the present value of the following sequence of willingness to pay: $150 this year; $150 next year; $150 in year 2, and
goldenfox [79]

Answer:

$472.10

$482.78

decreasing the discount rate increases the present value of the willingness to pay

Explanation:

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Cash flow in year 0 - 2 = $150

Cash flow in year 3 = $50

PV when I is 5% = 472.10

PV when I is 3% = 482.78

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

7 0
3 years ago
In determining whether to issue a loan, banks are not allowed to ask about an applicant's
Firlakuza [10]

Answer:

country of origin.

Explanation:

Banks have a set of requirements that borrowers need to meet to qualify for a bank loan. The banks will ask questions to determine if the customer is eligible for a loan. Most of the questions pertain to the purpose of the loans and the customer's ability to repay.

The bank will ask about employment history, credit history, tax information, personal information, the purpose of the loan,  collateral, and other questions related to the ability to repay. A person's country of origin is unnecessary and may elicit elements of discrimination.

3 0
3 years ago
Read 2 more answers
Shanna, a calendar year and cash basis taxpayer, rents property to be used in her business from Janice. As part of the rental ag
andreyandreev [35.5K]

}{y}[/tex]Answer:

For part A) The <u>entire 2019 is deductible.</u>

For part B) $9,075

Explanation:

FOR PARTE A) we know the equation is:

\frac{24,200}{y} number of months where y is 12 (which means the entire year) and the number of months will be also 12. So the equation will be:

\frac{24,200}{12} 12 and the answer will be 24,200 which means the entire year is deductible.

FOR B) the equation to be used  will be replaced by 24 (two years) and the number of month will be 9.

so the equation is:

\frac{24,200}{24} 9

the answer wil be $9,075

5 0
4 years ago
In the context of brand extensions, stretchability of a brand depends on: a. preventing the transfer of meaning from the new bra
Sophie [7]
The answer should be A
3 0
2 years ago
Type the correct answer in the box. Spell all words correctly.
Vsevolod [243]
<h2>The customer is motivated to tae the action at the Growth stage of advertising.</h2>

Explanation:

Product life cycle has four stages.

1. Introduction stage:

  • Product is introduced in the market
  • Sales is booming slowly
  • Investment on advertisement is planned

2. Growth stage:

  • It is also called early maturity stage
  • Here where the product is advertised and product promotion is extensive

3. Maturity stage:

  • Sales will be peak
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4. Decline stage:

  • This occurs when sales is dropped out
  • Production will be stopped

6 0
3 years ago
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