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
Lina20 [59]
3 years ago
10

Consider a bond (with par value = $1,000) paying a coupon rate of 7% per year semiannually when the market interest rate is only

3% per half-year. The bond has three years until maturity. a. Find the bond's price today and six months from now after the next coupon is paid. (Round your answers to 2 decimal places.)
Business
1 answer:
docker41 [41]3 years ago
7 0

Answer:

Explanation:

Using a financial calculator; input the following;

Duration to maturity ; N = 3*2 = 6

Par value of the bond ; FV = 1000

Semiannual interest rate; I = 3%

Semiannual coupon payment;PMT = (7%/2)*1000 = 35

then compute the price; i.e the present value; CPT PV = 1027.09

The price after 6-months would be as follows;

Duration to maturity ; N = 2.5*2 = 5

Par value of the bond ; FV = 1000

Semiannual interest rate; I = 3%

Semiannual coupon payment;PMT = (7%/2)*1000 = 35

then compute the price; i.e the present value; CPT PV = 1022.90

You might be interested in
Based on the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stoc
Sonja [21]

The expected return for stock A and B is 8.55% and 15.11% respectively.

<h3>What is the Expected return?</h3>

= (Probability of Recession × Return during recession) + (Probability of normal × Return during normal) + (Probability of boom × Return during boom)

Expected return for stock A:

= (0.20 * .05) + (0.57 * 0.08) + (0.23 * 0.13)

= 0.0855

= 8.55%

Expected return for stock B:

= (0.20 * 0.20) + (0.57 * 0.09) + (0.23 * 0.26)

= 0.1511

= 15.11%

Therefore, the expected return for stock A and B is 8.55% and 15.11% respectively.

Read more about Expected return

<em>brainly.com/question/25821437</em>

#SPJ1

3 0
2 years ago
Is W. L. Gore a mechanistic or an organic organization? Support your answer with examples from the case
Jet001 [13]

W. L. Gore has nearly 10,000 employees and more than $3 billion in annual revenues, but, as noted earlier, uses an extremely organic organizational structure. Employees have no bosses, participate on teams, and often create roles for themselves to fill functional gaps within the company.

4 0
2 years ago
All sales are made on account. Collections from customers are normally 70 percent in the month of​ sale, 20 percent in the month
Taya2010 [7]

Answer:

The expected ending balance on November 30 will be $134,500

Explanation:

Sales Collected (165,000*70%)                  $115,500

Expenses paid                                            ($36,000)

Cash Opening                                               $55,000

Cash ending Nov 30                                    $134,500

5 0
3 years ago
Read 2 more answers
Good Morning people how are you guys doin
il63 [147K]

Answer:

We are doing wonderful what aboit you

4 0
3 years ago
Brianna is giving a speech on job specialization for her business class. She will most likely tell the class that one of the rea
valina [46]

Answer:

Option B.

Explanation:

Job specialization can be defined as the process whereby a person or a group of individuals who are highly qualified in a specific field are assigned to complete a particular task or to focus on their area of expertise effectively. As can be deduced from the name, job specialization refers to having a specialty or expertise in a specific sector of work.

Companies have different departments, like accounting and admin, these departments cannot be handled by just one person, regardless of whether the person is skilled in both departments. This is where job specialization comes in.

One other important aspect of job specialization is the potential to increase the level of employees' productivity and output. Productivity is of benefit to the employer, but specialization can also be of benefit to workers in that it may improve employment prospects.

5 0
3 years ago
Other questions:
  • George, a chef and owner of a popular restaurant, is always visiting his competition to observe how they are doing things in the
    14·1 answer
  • Greg and Joyce have an adjustable rate mortgage on their home. What is the key feature of this type of loan?
    5·1 answer
  • Where must all laws dealing with money originate why?
    7·1 answer
  • ames Corporation is planning to issue bonds with a face value of $501,500 and a coupon rate of 6 percent. The bonds mature in 10
    14·1 answer
  • Please please please help
    12·2 answers
  • Suppose the exchange rate is 90 yen per U.S. dollar and the United States wants to keep the exchange rate at a target rate of 90
    13·1 answer
  • What percentage tariff increase has nersa granted eskom for the financial period 2016/2017?
    5·1 answer
  • When you state a business rule that pertains to your​ organization, such as​ "at my​ university, a student may declare only one
    11·1 answer
  • A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's una
    9·1 answer
  • Assume that you are the president of your own company and paid a year end bonus according to the amount of net income earned dur
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!