A P5000 par value bond bearing a coupon rate of 8 percent will mature after 7 years. What is the value of the bond, if the discount rate is 12 percent?
Q: 4. You are evaluating a project that will cost $534,000, but is expected to produce cash flows of…
A: Payback period is an investment appraisal tool. It represents the time required for a project to…
Q: Average payment period of PETRON STATEMENT OF FINANCIAL POSITION AND INCOME STATEMENT OF 3 COMPANIES…
A: Average payment period is the time taken to pay accounts payable dues. It can be calculated Average…
Q: Assume that a new law is passed which restricts investors to holding only one asset. A risk-averse…
A:
Q: G.I loan over 30 years has an annual nominal interest rate of 3.8% paid quarterly. What is the…
A: "Hi, Thanks for the Question. Since you asked multiple questions, we will answer first question for…
Q: Sandhill Inc. wants to purchase a new machine for $37,840, excluding $1,300 of installation costs.…
A: Before investing in new projects or assets, profitability of the project is evaluated by using…
Q: How much will the coupon payments be of a 10-year $1,000 bond with a 9.5% coupor rate and quarterly…
A: Par value = $1000 Coupon rate = 9.5% Number of coupon payment per year = 4
Q: Your company issues debt in yen that has a YTM in yen of 7.5%. The 1-year LIBOR rate in ye is 1% and…
A:
Q: Suggest a company that has a successful history managing their brand. What are their contributing…
A: The company with the most successful history would be APPLE without any doubt. It was established in…
Q: IN Capital Asset Pricing Model a) how is it used in practice b) how important is this model c)…
A: Risk and return are the two inseparable parts of the investment. Before investing in any security,…
Q: What do you think about the interest rate i for
A: A recession refers to the time period which is affected by a temporary economic decline during which…
Q: A small coffee shop currently offers a cup of cafe latte for P106. The variable costs are P63 per…
A: Here, Number of Units Sold is 10,079 Sales Price per cup is P106 Variable Cost per cup is P63 Profit…
Q: Compute the net present value of each potential investment. Use 7 years for Project 1 and 5 years…
A: Project 1 Net Cash flows x Present Value of Annuity at 10% = Present Value of Net Cash Flows Years…
Q: Consider the following: today's interest rate for a 15-year bond is 8%; today's interest rate for a…
A: The interest rate for bonds with comparable maturities and risk levels can be obtained through…
Q: On September 6, Irene Westing purchased one bond of Mick Corporation at 91.75%. The bond pays 5.25%…
A: Bonds are the debt securities which are issued by the companies or the government to arrange the…
Q: onsider the following options portfolio. You write a call option on IBM with exercise ou also write…
A: In writing call will give you profit when prices goes below exercise price and writing put will give…
Q: XYZ Inc., the Calapan-based computer manufacturer, has developed a new all-in-one device: phone,…
A: Here, Cost of Real Estate in Year zero is $100,000 R&D Expenses in Year 0 is $175,000 Cost of…
Q: value of delta of a 3 month European put option on the stock
A: European put option refers to the option that allows the holder to sell the under security at the…
Q: A woman expects to have $10,000 in 4 years to buy a pair of earrings. She plans to create a sinking…
A: FV Amount required = $10000 Period = 4 years pmt Amount deposited every 6 months Fund…
Q: A credit card has a 21.99% APR, a minimum monthly payment of 3.15%, and a current monthly statement…
A: Minimum monthly payment is the least amount of money paid by the credit card holder every month .…
Q: Consider three securities that will pay risk-free cash flows over the next three years and that have…
A: The cash flows of Security B4 can be replicated by buying 5 units of Security B1 and 2 units of…
Q: Here's an example of how breakpoint discounts on sales commissions for mutual fund investors work:…
A: NAV refers to net asset value. For a mutual fund its NAV = total assets - total liabilities
Q: Question 5: Find the missing EAR and APR in each of the following cases: APR Number of Times…
A: Effective rate is computed based on its compounding period and Effective rate always equal to or…
Q: The manufacturing firm Rebo is considering a new capital investment project. The project will last…
A: NPV is calculated by deducting present value of cash outflows from present value of cash inflows.
Q: 8. Suppose a certain bond sold a volume of 2, 375, 000. If the bonds sold for $824.99, calculate the…
A: Last price is the price of the bond is expressed as a percentage of Face value = (100 * Price)/Face…
Q: O a. None of the above Ob. Decrease in Money Supply O C. Increase in Money Supply d. No Change in…
A: Solution: Credit Creation Multiplier is a multiple which shows that how much multiple times the…
Q: Which of the following functions of the Commercial Bank's primary functions is influence by the…
A: Solution:- Reserve Requirement Ratio (RRR) means the minimum amount of deposit a bank has to keep…
Q: II. Find the trade discount and trade discount rate. Round to the nearest hundredth percent. Trade…
A: Solution: Trade discount is the discount given on listed price in the normal course of business. The…
Q: Production, Direct Labor, Direct Materials, Sales Budgets, Budgeted Contribution Margin Greiner…
A: Answer- Working Note : Greiner Company Production Budget For the First Quarter of the…
Q: The correct answer is 9.1978 Please explain
A: The provided solution is correct. But the expert rounded the final answer to two decimals.
Q: A annuity pays $200 at the end of each month for 5 years and $300 at the end of each month for the…
A: PV of annuity with continuous compounding is to be determined. Here, PMT1 = $200 Number of periods…
Q: Ever since your first birthday, your parents have been depositing $1,000 into a college savings…
A: Annual deposit (P) = $1,000 Number of annual deposits (n) = 18 Interest rate (r) = 7%
Q: Explain each of the investment instruments stated below that offered by financial institutions.…
A: In the world of investing and finance there are several investment instruments. A person or an…
Q: Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It…
A: Given, The cost of machine is $6,000,000 Installation charges $10,000
Q: A buyer is considering purchasing a 35-acre parcel in Apache Junction, Arizona for economic…
A: Solution: As per the terms and conditions of the loan, the loan can be repaid in equal periodic…
Q: Apple’s market capitalization in mid-2016 was $484 billion, and its beta was 1.03. At that same…
A: Data given: Market capitalization = $484 billion Equity beta (BE) =1.03 Cash =$25 billion Debt= $69…
Q: 1- Find the internal rate using the method of Internal Rate of Return (IRR) if i = 15%, for the…
A: IRR is the rate at which Present value of cash Inflows is equal to Present Value of cash Outflows…
Q: Briefly explain three risk exposures that an analyst should report as part of an enterprise risk…
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…
Q: What is the simple interest on ₱ 30,000 for six months at a simple interest rate of 12% (b) What is…
A: Answer - Part a - Calculation of Simple Interest - Simple Interest = PRT /100 Given, P = 30,000 R =…
Q: city of Oak Ridge is evaluating three mutually exclusive landscaping plans for refurbishing a public…
A: B/C ratio is benefit to cost can be found as present value of annual benefits to initial investment…
Q: -28,800 20,400 Assuming a cost of capital of 14%, which of these projects should be accepted?…
A: To determine which project should be accepted we can compute the NPV of each project. NPV refers to…
Q: Suppose a French bottle of champagne costs 20.5 euros. Instructions: Enter your responses rounded to…
A: The price of a currency in relation to another currency is called exchange rate. Exchange rate helps…
Q: You are faced with making a decision on a large capital investment proposal. The capital investment…
A: IRR is the rate at which Present value of cash Inflows is equal to Present Value of cash Outflows.…
Q: Given n1-year par rate = 4% n2-year par rate = 5.2% n3-year par rate = 6.4% nSuppose the bond…
A: Here, n1-year par rate = 4% n2-year par rate = 5.2% n3-year par rate = 6.4%
Q: A) The rate of return on a bond is expected but the interest rate is unexpected.
A: Interest rates refer to the proportion of the loan which is to be paid by the borrower to the lender…
Q: 8. Suppose a certain bond sold a volume of 2, 375, 000. If the bonds sold for $824.99, calculate the…
A: a) Last price is the price of the bond is expressed as a percentage of Face value = (100 *…
Q: An existing machine in a factory has an annual maintenance cost of P40,000. A new and more efficient…
A: Present value is referred as the current value of the future amount of funds or cash flow streams,…
Q: XYZ Inc., the Calapan-based computer manufacturer, has developed a new all-in-one device: phone,…
A: Land Cost $ 1,00,000.00 Net working capital $ 1,75,000.00 Construction Costs $…
Q: Management is considering buying a pump that costs $20,000 and could save them $7,500 per year over…
A: NPV is the difference between the Present Value of Cash Inflows and Initial Investment. A project…
Q: Good Credit is between O 680-700 O 620-800 O 650-700
A: Credit score determines the credit worthiness of customers. A good credit scores enables the…
Q: (a) Compare and contrast the unit trusts and the exchange traded funds.
A: Unit trust is referred as the type of mutual fund, where the funds from the different investors are…
- A P5000 par
value bond bearing a coupon rate of 8 percent will mature after 7 years. What is the value of the bond, if the discount rate is 12 percent?
Please provide solutions to your answers.
Step by step
Solved in 2 steps
- A zera coupon bond with promised payment of $100 to be paid in 5 years has price equal to$80. What is the YTM?Solve the following problem. Use Excel, financial calculator, or PV and FV Tables. Show your work with the formulas and figures inserted in them. What must be the present value of an AED 10,000 bond with a 9 percent coupon rate, semiannual coupons that has 8 years to maturity if the discount rate is 10 percent.The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). a.Suppose that today you buy a bond with an annual coupon rate of 6 percent for $1,150. The bond has 20 years to maturity. What rate of return do you expect to earn on your investment? Assume a par value of $1,000. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)b-1.Two years from now, the YTM on your bond has declined by 1 percent, and you decide to sell. What price will your bond sell for? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)b-2.What is the HPY on your investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
- Suppose that you buy a TIPS (inflation-indexed) bond with a 1-year maturity and a coupon of 2% paid annually. Assume you buy the bond at its face value of $1,000, and the inflation rate is 10%. a. What will be your cash flow at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be your real return? c. What will be your nominal return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)Hi can teach me how to solve the question step by step? TQ 2. suppose that the market interest rate is 5%. calculate the present value of the following. a. A coupon bond with an annual coupon payment of $135 and a face value of $1500 that matures in five years. b. A discount bond with a face value of $5000 that matures in one year. c. A fixed payment loan with annual payments of $163 that matures in three years.The YTM on a bond is the interest rate you earn on your investment if interest rates don't change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). a. Suppose that today you buy a bond with an annual coupon rate of 10 percent for $1, 120. The bond has 17 years to maturity. What rate of return do you expect to earn on your investment?
- Consider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the bond is purchased at $500, and can be resold next year for $400. What is the rate of return of the bond? What is the yield to maturity of the bond?The YTM on a bond is the interest rate you earn on your investment if interest rates don't change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). a. Suppose that today you buy a bond with an annual coupon rate of 7 percent for $1,160. The bond has 15 years to maturity. What rate of return do you expect to earn on your investment? Assume a par value of $1,000. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b- Two years from now, the YTM on your bond has declined by 1 percent, and you 1. decide to sell. What price will your bond sell for? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b- What is the HPY on your investment? (Do not round intermediate calculations and 2. enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Expected rate of return b-1. Bond price b-2. HPY % I %Answer this question using the Par Value formula and showing all work. You have been given the following information for an existing bond that provides coupon payments. Par Value: $2000 Coupon rate: 6% Maturity: 4 years Required rate of return: 6%. What is the Present Value (PV) of the bond? If the required rate of return by investors were 11% instead of 6%, what would the Present Value of the bond be? Look at the same Par Value $2,000 Same Coupon rate: 6% Maturity: 10 years Required rate of return: 7% What is the Present Value of the Bond now? Explain how the longer maturities and higher required rate of return by investors affects the bond valuation.
- The closing price of a U.S. Treasury bond with a face value of $1400 is quoted as 105.45 points, for a current yield of 3.7%. If you buy this bond, how much annual interest will you receive? Make sure your final answer is in a statement form. Show all your math formula/setun math work, and your answer in the space below.Suppose that you purchase a bond from a company that promises to pay $52.66 in coupon payments for the next 6 years, with a maturity bonus of $152.05 What is the total amount of money that this bond will pay out over its Motime? Round your answer to two (2) decimal places if necessary and do not include a dollar sign Plz do fastAn investor has the option toinvest in one of two bonds whose nominal price is € 1,000 and their coupon, paid annually, 11%. Bond X has a maturity of 5 years and Y is 15 years. Create a table with the price of the two bonds in the case where the discount rate is 8%, 11% and 14% respectively and briefly comment on the results. If the investor wants to minimize interest rate risk in which bond should he invest?