DURATION (in DURATION (in ASSETS AMOUNT years) LIABILITIES & EQUITY AMOUNT years) 1- year time deposits 3- year certificate of deposits Cash 100 620 1 3- year commercial Ioan 700 300 2.81 6- year Treasury bond 200 4.99 Equity 80 Total Assets 1000 Total Liabilities & equity 1000 a. Using the Macaulay approach, calculate the duration of the 3– year commercial loan with a cashflow (coupon) rate of 10%. The entire loan is repaid at maturity. The value of the loan is $700 and interest rates are 12%. Use the duration of the 3- year commercial loan calculated in (a) and the other assets and liabilities durations to calculate: b. Duration of Assets c. Duration of Liabilities

DURATION (in DURATION (in ASSETS AMOUNT years) LIABILITIES & EQUITY AMOUNT years) 1- year time deposits 3- year certificate of deposits Cash 100 620 1 3- year commercial Ioan 700 300 2.81 6- year Treasury bond 200 4.99 Equity 80 Total Assets 1000 Total Liabilities & equity 1000 a. Using the Macaulay approach, calculate the duration of the 3– year commercial loan with a cashflow (coupon) rate of 10%. The entire loan is repaid at maturity. The value of the loan is $700 and interest rates are 12%. Use the duration of the 3- year commercial loan calculated in (a) and the other assets and liabilities durations to calculate: b. Duration of Assets c. Duration of Liabilities

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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For each of the unrelated transactions described below, present the entries required to record each transaction. Flounder Corp. issued $18,800,000 par value 11% convertible bonds at 99. If the bonds had not been convertible, the company's investment banker estimates they would have been sold at 95. 1. 2. 3. Culver Company issued $18,800,000 par value 11% bonds at 98. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. Suppose Sepracor, Inc. called its convertible debt in 2020. Assume the following related to the transaction. The 12%. $10,100,000 par value bonds were converted into 1,010,000 shares of $1 par value common stock on July 1, 2020. On July 1. there was $52,000 of unamortized discount applicable to the bonds, and the company paid an additional $75,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method.
Consider the relative liquidity of the following assets: Assets 1. A bond issued by a publicly traded company 2. The funds in a money market account 3. A $20 bill 4. Your truck Select the assets in order o Most Liquid Second-Most Liquid Third-Most Liquid Least Liquid Bond 520.00 bill Truck Funds held in a money market account quid.
Refering from the below tables What is the current portion of long-term liabilities reported and for what type of liabilities? Non-current liabilities Long term financing 6,728,738,161 Deferred liabilities 491,518,519 Long term payables - Current liabilities Trade and other payable 2,525,6236,858 Accrued interest 124,294,821 Short term borrowing 4,657,389,209 Current position of long-term payable 457,090,780 Current position of long-term Financing 1,628,822,242 Provision for taxation 238,198,131
ANSWER AS MANY QUESTIONS POSSIBLE THIS IS A STUDY GUIDE Ch 11 Bonds and LTL1. When will bonds sell at a premium and discount? 2. Calculate bond interest under SL method.3. Impact of amortization of bond premium/discount on interest expense.4. Give an example journal entry for amortization of bond premium/discount.5. What is the Gain/loss on redemption of bonds? How do you calculate?6. Understand method of calculating PV of future cash flows -specifically for a bond.7. Why are bonds a popular source of financing?8. Contract rate (market rate) is used for what calculation purpose?Ch 10 SE: Corporations1. What are Rights possessed by common stockholders?2. What are a journal entries for stock issuance, cash dividend, stock dividend?3. What is the calculation of dividends when cumulative preferred stock is outstanding?4. Journal entries for treasury stock, financial statement presentation. Gain/loss on reissue of treasury stock.5. Prior period adjustment - example of, accounting for?6.…
rseware-delivery//ua/69158/45467554/aHR0cHM6Ly9mMS5hcHAUZWRtZW50dWouY29tL2xlYXJUZXItdWkvc2Vjb25kYXJ5L3VzZXI: Unit Activity: Mathematical Models and Investments Part C Why are municipal bonds less attractive to foreign bondholders? BIUX² X₂ 15px Space used (includes formatting): 0 / 15000 15px AVA Part D Why does building a ladder of bonds protect against changes in interest rates?/ BIUX² X₂ Space used (includes formatting): 0/15000 === A 23 Apr 13 8 of 11 11:26 0 ⠀ ► Save & Exit
Consider the following balance sheet Expected Balance Sheet for XYZ Bank Assets Yield Liabilities Cost Rate sensitive $ 1300 8% %$4 1700 8% Fixed rate $500 9% $1500 5% Non earning $ 5100 $. 1800 Equity 1900 Total $ 6900 $6900 What is the Net Interest Margin (NIM)
41. After conducting a rate-sensitive analysis, a bank finds itself with the following amounts of rate-sensitive assets and liabilities (RSAS and RSL) and fixed-rate assets and liabilities (FRAs and FRLs); the rate of return and cost rates on the accounts are also given: Assets RSAS @ 4.25% FRAS @ 5.15% NEA Total Amount (Million $) S 322 S 700 S 120 $1,142 Liabilities & Equity RSLS @ 3.11% FRLS @ 4.95% Equity Total If the bank wishes to set up a swap to totally hedge the interest rate risk, the bank should A. pay a variable rate of interest and receive a fixed rate of interest. B. pay a fixed rate of interest and receive a variable rate of interest. Amount (Million $) S 200 $ 800 S 142 $1,142 C. pay a variable rate of interest and receive a variable rate of interest. D. pay a fixed rate of interest and receive a fixed rate of interest.
Which of the following is an example of a money market instrument? (Select all that apply) a. 2-year Treasury Bond b. Certificate of Deposit C. Swap d. Stop-call
What is the carrying value of the loans receivable as of December 31, 2022 after impairement recognition A. 8,123,0231 B. 8,000,000 C . 8,211,570 D, 9,211,570
Consider the following amortization schedule: Payment # Payment 1 966.45 2 966.45 3 966.45 Interest Debt Payment 750.00 748.92 X 216.45 217.53 Y Balance 149, 783.55 149,566.02 2 With the exception of column one, all amounts are in dollars. Calculate . Give your answer in dollars to the nearest dollar. Do not includo ar or the dollar sign in your answor
Q. 42. Calculate Proprietary ratio from the following : 12,80,000 7,20,000 5,60,000 3,30,000 2,20,000 1,90,000 Fixed Assets Current Assets 8% Debentures 10% Mortgage Loan Bank Overdraft Trade Payables
The Interest rate on which of the following is the LIBOR? a.Banker's acceptances b.Repurchase agreement c.Certificate of Deposits d.Eurodollar CD

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