The convexity of the bond is 61.810 and the duration of the bond is 7.330 years.
<u>Explanation</u>:
- A newly issued bond has a maturity of 10 years. It pays a 7.7% coupon rate. The coupon payments will receive each year. Using the coupon payments the year will be reduced.
- The maturity year will get reduced. So the duration of the bond is approximately 7.330 years. If the bond is sold at par value the convexity can be calculated using the number of years.
- So the convexity of the bond is 61.810.
Answer:
False
Explanation:
' Once a business has sold a service, it no longer needs to be concerned with customer satisfaction' is a False statement.
Customers are the pillars on which every business stands & their satisfaction should be a supreme priority for a business.
There is need of 'After Sale Services' after selling a service. This is important to ensure customer's expectations from the product are met, & they are satisfied with the business' services.
After sale services make customers feel valued. This generates customer retention, customers' loyalty towards business. Such customers are also likely to do word marketing & build a business' reputation in front of other customers.
Answer:
28 month (approx)
Explanation:
Given
Present value = $470
Monthly Payment = $20
Interest Rate = 15% annual = 15% / 12 = 1.25% monthly
=0.0125
<h3>
![Present Value = PMT [\frac{1-(1+i)^{-n}}{i}] \\470 = 20 [\frac{1-(1+0.0125)^{-n}}{0.0125}]\\470/20 = [\frac{1-(1+0.0125)^{-n}}{0.0125}]\\23.5 \times 0.0125 =1-(1+0.0125)^{-n}\\1-0.29375= (1+0.0125)^{-n}\\0.70625 = (1+0.0125)^{-n}\\0.70625 =(1.0125)^{-n}\\0.70625= \frac{1}{(1.0125)^{n}}\\(1.0125)^{n}=1.4159292\\n=28(approx)](https://tex.z-dn.net/?f=Present%20Value%20%3D%20PMT%20%5B%5Cfrac%7B1-%281%2Bi%29%5E%7B-n%7D%7D%7Bi%7D%5D%20%5C%5C470%20%3D%2020%20%5B%5Cfrac%7B1-%281%2B0.0125%29%5E%7B-n%7D%7D%7B0.0125%7D%5D%5C%5C470%2F20%20%3D%20%5B%5Cfrac%7B1-%281%2B0.0125%29%5E%7B-n%7D%7D%7B0.0125%7D%5D%5C%5C23.5%20%5Ctimes%200.0125%20%3D1-%281%2B0.0125%29%5E%7B-n%7D%5C%5C1-0.29375%3D%20%281%2B0.0125%29%5E%7B-n%7D%5C%5C0.70625%20%3D%20%281%2B0.0125%29%5E%7B-n%7D%5C%5C0.70625%20%3D%281.0125%29%5E%7B-n%7D%5C%5C0.70625%3D%20%5Cfrac%7B1%7D%7B%281.0125%29%5E%7Bn%7D%7D%5C%5C%281.0125%29%5E%7Bn%7D%3D1.4159292%5C%5Cn%3D28%28approx%29)
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Answer:
False
Explanation:
The contribution margin will be higher for the company with the highest fixed expenses. Contribution margin = selling price - variable cost
For example:
Company A Company B
sales price per unit $100 $100
total costs per unit $80 $80
variable costs per unit $50 $40
<u>fixed costs per unit $30 $40 </u>
contribution margin $50 $60
