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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

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Your father invested a lump sum 33 years ago at 4.25 percent interest. Today, he gave you the proceeds of that investment which
Nutka1998 [239]

Answer:

your father originally invest is $13035.72

Explanation:

given data

investment time = 33 years

interest rate = 4.25 percent

totaled $51,480.79

solution

we get present value by future value formula that is

future value = present value × (1+r)^{t}    .........................1

put here value and we get

$51480.79 =  present value × (1+0.0425)^{33}

solve it we get

present value = $13035.72

so your father originally invest is $13035.72

8 0
3 years ago
the yellow company has a current ratio of 2.65 . The acid test ratio is 2.01 . The current liabilities of the are company $45,00
ivann1987 [24]

Answer:

Amount of inventory = $28,800

Explanation:

Given:

Current ratio = 2.65

Acid test ratio = 2.01

Current liabilities = $45,000

Prepaid expenses = $0

Find:

Amount of inventory

Computation:

Current ratio = Current assets / Current liabilities

2.65 = Current assets / 45,000

Current assets = $119,250

Acid test ratio = [Current assets - Inventory - Prepaid expenses] / Current liabilities

2.01 = [119,250 - Inventory - 0] / 45,000

90,450 =119,250 - Inventory

Amount of inventory = $28,800

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3 years ago
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3 years ago
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Assume a fixed cost for a process of $15,000. The variable cost to produce each unit of product is $10, and the selling price fo
Stels [109]

Answer:

1,000 units

Explanation:

The break even point refers to the number of units of a product a company would sell such that the company's sales is equal to the total cost.

The total cost includes the fixed and variable costs. As such, at break even point, net profit is zero.

Let the number of units be G

25G = 10G + $15,000

15G = $15,000

G = 1000 units

The number of units that has to be produced and sold to break even is 1,000 units.

6 0
3 years ago
What is from utility
ella [17]

Explanation:

Refers to how well a product or service meets the customer's needs

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3 years ago
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