1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alex17521 [72]
2 years ago
7

Consider two $10,000 face value corporate bonds. Bond A is currently selling for $9,980 and matures in 15 years. The Bond B sell

s for $9,350 and matures in 3 years. a) Calculate the current yield as a percentage to 2 decimal places for both bonds if both have a coupon rate equal to 5%. Bond A % Bond B % b) Calculate the yield to maturity as a percentage to 2 decimal places for both bonds if both have a coupon rate equal to 5%. Bond A % Bond B % Which current yield is a better approximation of the yield to maturity, A or B
Business
1 answer:
lorasvet [3.4K]2 years ago
8 0

Solution :

Current yield of the Bond if the bonds are selling at a price of $ 9980.

Current yield = annual coupon amount / current selling price

Current yield $=\frac{10000 \times 5\%}{9980}$

                     $=\frac{500}{9980}$

                     = 0.0501

                     = 5.01 %

The current yield of a bond if the bonds are selling at $ 9350

Current yield = annual coupon amount / current selling price

Current yield $=\frac{10000 \times 5\%}{9350}$

                     $=\frac{500}{9350}$

                     = 0.0535

                     = 5.35 %

You might be interested in
In two years, you will receive the 1st payment from an irrevocable trust your grandparents set up. The trust is set up make paym
NikAS [45]

Answer:

$50,000

Explanation:

Note: There is an assumption that the payment is yearly payment & is received at the end of every year

Present Value of Perpetuity = Payment Receivable in 1st year/ (Discount rate - Growth rate)

Present Value of Perpetuity = 500/(2%-1%)

Present Value of Perpetuity = 500/0.01

Present Value of Perpetuity = $50,000

So, the present value of all the future trust payments is closest to $50,000

6 0
3 years ago
Ok, I actually need a lot of help- 30 points to whoever can
Olin [163]

Answer:

I would say that the answer is "recording information about a fraudulent business".

Explanation:

His job is to make sure that consumers are treated fairly.

4 0
2 years ago
A car insurance policy has a $500 deductible for comprehensive coverage and a $1000
Alexus [3.1K]
$1500 will be paid by the Insurance policy as the accident has lead to $725 damage to John’a car which will be covered up to $500 (full amount that insurance can pay), leaving him to pay off the rest. As for the liability that is worth $1525 so insurance will pay what it can which is $1000, leaving John to pay off the remaining amount. So the insurance is paying $1500 ($500 comprehensive coverage plus $1000 liability coverage)
7 0
3 years ago
Read 2 more answers
Supply-side policies have proven that smaller government makes the economy more efficient. ​ Select one: True False
scoundrel [369]

Answer:

The given statement is "False".

Explanation:

  • Supply-side policies include those strategies that increase the economic ability of an enterprise as well as the ability to manufacture. To increase supply-side efficiency, there are also many specific steps that somehow an authority may undertake.
  • Any strategy that increases the economic capacity of a nation's infrastructure and therefore its ability to transfer should be under the supply-side legal framework.
3 0
3 years ago
When traveling to another country you have the choice of paying for the stay when you book the reservation or when you check out
Digiron [165]

Answer and Explanation:

In the given situation, it is mentioned that while travelling to another country you have two choices for paying at the time of booking or at the time of checking out. Now at Jan the person made a reservation for staying at Italy and completed the stay as on April 30th so here the change in inflation would be matters whether it is increasing or decreasing. It is better to pay off at advances as there is a chances that the price could rise in near future

3 0
3 years ago
Other questions:
  • The stock price of company x doubled over the past year, the stock price of company z decreased by over 50%. if the market is ef
    9·1 answer
  • Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm
    10·1 answer
  • what is the amount of the overall tax (corporate level + shareholder level) on the $590.000 of pre-interest expense earnings if
    15·2 answers
  • Internet advertising has emerged as a media option of great opportunity for advertisers because of its superior target market se
    11·1 answer
  • After graduating from high school, Shawn took out a loan to help pay for college. Now, four years later, Shawn has graduated fro
    9·2 answers
  • 19. Marketing can be most seriously affected by which of the following?
    12·2 answers
  • A 19th-century stage director is producing a vaudeville performance. The director wants to create a feeling of suspense and dang
    8·1 answer
  • Which of the following arguments are in favor of active stabilization policy by the government? Check all that apply
    12·1 answer
  • Gillian is a real estate licensee who attends a party at the home of a mortgage broker, Tim, with whom she has worked in the pas
    11·1 answer
  • How can an economic crisis cause citizens to accept a totalitarian government? Jobless citizens become desperate for someone who
    5·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!