Question 2A
SAI Ltd issued a $250,000 bond at the coupon rate of 2 percent payable semi-annually. Now, the bond has a remaining life of 4 years.
Two years from now, you bought the SAI bond when the market interest rate for a new SAI bond is 4 percent. How much did you pay for the bond?
Illustrate your answer using the bond valuation equation and not using an online calculator / software.
You sold the bond purchased in part i. after holding it for a year, when interest rates (for bonds of similar risk as SAI’s bonds) fell to 3 percent. What is the percentage gain / loss on the bond? Illustrate your answer using the bond valuation equation and not using an online calculator / software.
Answers
Therefore, the bond would have a percentage loss of approximately 0.5965%.
To calculate the purchase price of the bond two years from now, we can use the bond valuation equation:
\(\[\text{{Purchase price}} = \frac{{\text{{Coupon payment}}}}{{(1 + \text{{Market interest rate}})^n}} + \frac{{\text{{Face value}}}}{{(1 + \text{{Market interest rate}})^n}}\]\)
In this case, the coupon payment is 2% of the face value ($250,000) and is paid semi-annually, so the coupon payment per period is $2,500. The remaining life of the bond is 4 years, but since we are purchasing it 2 years from now, the time period (n) becomes 2 years.
Using the market interest rate of 4% for a new SAI bond, we can substitute these values into the bond valuation equation:
Purchase price \(= (2,500 / (1 + 0.04)^2) + (250,000 / (1 + 0.04)^2)\)
= ($2,500 / 1.0816) + ($250,000 / 1.0816)
≈ $2,310.40 + $230,416.54
≈ $232,726.94
Therefore, you would pay approximately $232,726.94 for the bond two years from now.
To calculate the gain or loss on the bond when sold after holding it for a year when interest rates fell to 3%, we can again use the bond valuation equation. Since one year has passed, the remaining life of the bond becomes 3 years.
Sale price \(\[\text{Purchase price} = \frac{\text{Coupon payment}}{(1 + \text{Market interest rate})^n} + \frac{\text{Face value}}{(1 + \text{Market interest rate})^n}\]\)
Using the market interest rate of 3% for similar-risk bonds, we can substitute the values:
Sale price \(= (2,500 / (1 + 0.03)^3) + (250,000 / (1 + 0.03)^3)\)
= ($2,500 / 1.0927) + ($250,000 / 1.0927)
≈ $2,287.85 + $229,050.79
≈ $231,338.64
The sale price of the bond would be approximately $231,338.64.
To calculate the percentage gain or loss, we can use the formula:
Percentage gain/loss = ((Sale price - Purchase price) / Purchase price) * 100
Percentage gain/loss = (($231,338.64 - $232,726.94) / $232,726.94) * 100
= (-$1,388.30 / $232,726.94) * 100
≈ -0.5965%
Therefore, the bond would have a percentage loss of approximately 0.5965%.
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Related Questions
A lineman with 11 months on-the-job experience was electrocuted while working on grounded de-energized lines. He was working from a defective basket on an articulated boom aerial lift when the basket contacted energized lines which ran beneath the de-energized lines. The defective basket permitted current to pass through a drain hole cut into the body of the basket, then through the employee, and to ground via the de-energized line. What could have been done to avoid this accident?.
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As they were working from a defective basket on an articulated boom aerial lift when the basket contacted energized lines which ran beneath the de-energized lines in which the current cut into the body of the basket, then through the employee, and to ground via the de-energized line, the action that could have been done to avoid this accident includes:
A. Guards or barriers should have been erected as necessary to adjacent energized lines.C. The worker should have been instructed on how to recognize and avoid unsafe conditions and also on regulations that apply to their work environment.E.Had an inspection or test occurred before starting work, the defect would have been noted.What is an accident?Basically, an accident refers to any unfortunate incident that happens unexpectedly and unintentionally, which typically resulting in damage or injury. At a workplace, the provisions of the Workplace safety laws seeks to prevent against any accident.
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please help me i reallu need your help
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Explanation:
Answer:
what's the question??
..................._.....................
The ratio of the price of two goods on a graphed budget line is measured by its:.
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There are lines in budget. The ratio of the price of two goods on a graphed budget line is measured by the slope of the budget.
What is a budget lineThis is regarded as a two-dimensional graph that shows the various choices one have between two goods given the money one have to spend. It is also known as budget constraint.
The ratio of the price of good X that is found on the horizontal axis to the price of good Y on the vertical axis is known as the slope of the budget.
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Target market for a skating rink?
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Answer:
Civic organizations, school groups, and church groups are key target markets for McKenzie Roller Rink. Parties with over ten people would be considered a group. It is our intent to create a wholesome family atmosphere and so there will be an effort to encourage families to consider skating as a recreational option.
Which should be included in a firm's business model?
Answers
A firm's expected revenues and expenses are what should be included in a firm's business model.
What is a business model?A business model is document that contains processes and procedures of how a company would operate.
This document is important for effective organization control and also assist coordinate business relationships amongst stakeholders
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PLEASE HELP I'VE BEEN TRYING TO FIGURE THIS OUT FOREVER Select the correct answer. According to TARP, on average, what percentage of unhappy customers leave without complaining?
A. 10 percent
B. 25 percent
c. 95 percent
d.50 percent
Answers
The answer is 95%.
The percentage is 95%, it is actually 96% but 95 is the closest answer.
Answer:
c.) 95 percent
Explanation:
took on edmentum is correct
Select the correct answer. Ship's engineers help keep ships running well. A. True B.False
Answers
Answer:
i am late but this true
Explanation:
I did the test on this and got it right :)
Below is a list of key outputs from the different service value chain activities:
1. Architectures and policies.
2. Change or project initiation requests.
3. Change requests.
4. Consolidated demands and opportunities.
5. Contracts and agreements with external and internal suppliers and partners.
6. Improvement initiatives and plans.
7. Improvement opportunities and stakeholder feedback.
8. Improvement status reports.
9. Information on the completion of user support tasks.
10. New and changed products and services.
11. Portfolio decisions for Design & transition.
12. Product and service performance information.
13. Product and service portfolio.
14. Product and service requirements.
15. Requirements and specifications.
16. Service components.
17. Services.
18 Strategic, tactical and operational plans.
19. User support tasks.
20. Value chain performance information.
Which one of the following answer options provides the MOST correct combinations (most correct items in their correct service value chain activities) of outputs from the service value chain activities directly relating to the shortcomings discovered by the IT executive?
Answers
The MOST correct combination of outputs from the service value chain activities directly relating to the shortcomings discovered by the IT executive is: Design & transition activity : portfolio decisions; Operations: user support tasks.
The Design & transition activity in the service value chain involves the planning and coordination of new and updated services. Portfolio decisions are one of the key outputs of this activity that would help address the shortcomings discovered by the IT executive.
Operations is another activity that involves the delivery and support of services, and user support tasks are a key output that could address the shortcomings discovered by the IT executive. Therefore, the MOST correct combination of outputs from the service value chain activities directly relating to the shortcomings discovered by the IT executive is Design & transition: portfolio decisions and Operations: user support tasks.
The service value chain is a set of interconnected activities that IT service providers use to deliver value to their customers. The key outputs of these activities help to ensure that IT services are delivered effectively and efficiently.
The Design & transition activity involves planning and coordinating new and updated services. The key outputs of this activity include portfolio decisions, which help to prioritize investments and ensure that resources are used effectively. Operations, on the other hand, involves delivering and supporting services.
The key output of this activity is user support tasks, which help to address the needs of end-users and ensure that they can use IT services effectively. By combining these outputs, IT service providers can ensure that their services are designed, delivered, and supported in a way that meets the needs of their customers and addresses any shortcomings that may be discovered by IT executives.
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The three elements of the marketing concept are __________.
a. Market share, customer needs, marketing mix
b. Customer needs, company goals, profits
c. Channel management, customer needs, profits
d. Planning, target market, social media marketing
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Answer:
B. Customer needs, company goals, profits
Explanation:
Did the demand curve shift during the coronavirus?
Answers
Answer:
Yes, it is correct to say that the demand curve shifted during the coronavirus, as the pandemic was an unexpected event that caused a planned economic recession, with the main objective of reducing production levels and demand in order to contain the pandemic.
One of the examples was the legislation that forced the closing of stores and restaurants in order to reduce the circulation and agglomeration of people in order to reduce the contagion by the virus, which caused a drop in demand and jobs.
What is an optical cue?
Answers
answer well they provide depth information when viewing a scene with both eyes.
i don't know how else to explain it
Personal finance please help me thank youu
Answers
Personal finance is the management of an individual's financial resources. It involves making informed decisions about earning, spending, saving, investing, and managing debt. Proper management of personal finances is essential for achieving financial goals and avoiding financial stress.
The first step in managing personal finances is creating a budget. A budget helps individuals to track their expenses and income and ensure that they are spending within their means. It is essential to prioritize expenses and allocate resources accordingly. This involves distinguishing between needs and wants and making necessary adjustments. Savings are a crucial aspect of personal finance. Individuals should aim to save at least 10% of their income to build an emergency fund and save for long-term goals.
Saving requires discipline and consistency, and it is essential to develop a savings plan that is achievable. Investing is another critical aspect of personal finance. Investing helps individuals to grow their wealth and prepare for future financial needs. It is crucial to research investment options and diversify investment portfolios to minimize risks. Managing debt is also essential for personal finance. Individuals should aim to minimize debt and pay off high-interest debts first. It is important to avoid accumulating unnecessary debt, such as credit card debt, which can quickly spiral out of control.
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if the mean is 32 and the median is 40 what would be value of mode
Answers
Answer:
Step-by-step po:
3 Median = Mode + 2 Mean
Given: Mean = 30 / Mode = 40
Now: 3 Median = Mode + 2 Mean
=> 3 Median = 40 + 2 (30)
=> 3 Median = 40 + 60
=> 3 Median = 100
=> Median = 100/3
=> Median = 33.3
Explanation:
Brandy works in a laboratory. She performs experiments to develop new methods of food production and processing.
Her job is best described as a(n):
Clarence is an independent worker who offers his pervices to many different farms. He teaches farmers how to run their farms more efficiently and safely. Clarence's job is best described as a(n):
Leon hires and manages workers who handpick oranges and other fruits on farms. He trains and oversees the
workers. Leon's job is best described as a(n):
The choice are:
Buyer or Purchasing Agent, Farm Labor Contractor, Food Scientist, Farm Management Adviser
Answers
Answer:
1) Food scientist
2) Farm management advisor
3) Farm labor contractor
Explanation:
what is harvested while still young and tender?
Answers
Answer:
Shelling beans and snap beans can both be harvested when they are young, tender, and before you seed the bumps of seeds establishing themselves in the pod. These beans can be eaten fresh off of the plant or cooked up in the kitchen.
Explanation:
help me plzzz
true or false
1.negotiating styles have been standardized in international markets
2.political risk refers to political decisions, conditions, events or activities in a country business climate
Answers
1.false
2.true
2. If changes happen during September or October, which expenses will you be able to change most easily? Give an example of how you could make a change. (5 points)
Answers
The correct answer to this open question is the following.
Although the question does not provide any context, references, or give options, we can say that if changes happen during September or October, the expenses you will be able to change most easily are according with the provisions projected in the annual plan, the budget, compared with the monthly expenses.
That is why a company has to elaborate on a good financial plan and overseeing the projections and true sales of the marketing and sales plan. This is important to take the proper control of expenses and revenues. Depending on the volume of sales during September and October, you can decide what kind of changes or adjustments to make in the following months.
Answer:
I would be able to change the variable expenses most easily. Such as food, clothing, and discretionary spending.
I could make the change by
Budgeting in October:
food from spending -$70 back to -$60
cut clothes off since I bought some already from -$40 to $0
budget my discretionary spending from -$60 back to -$40
This would increase my savings to $230
Oliver Company's unadjusted book balance at June 30 th is $8,800. The company's bank statement reveals bank service charges of $45. Two credit memos are included in the bank statement: one for $900, which represents a collection that the bank made for Oliver, and one for $50, which represents the amount of interest that Oliver had earned on its interest-bearing account in June. The accountant also identifies $200 in outstanding checks. Based on this information, Oliver's true cash balance is: a) $9,650. b) $9,795. c) $9,705. d) $9,505.
Answers
To determine Oliver Company's true cash balance, we need to make adjustments to the unadjusted book balance based on the information provided in the bank statement and by the accountant.
Starting with the unadjusted book balance of $8,800, we need to add the credit memo for the collection made by the bank on behalf of Oliver, which is $900. This brings the adjusted balance to $9,700 ($8,800 + $900).
Next, we need to subtract the bank service charges of $45, which reduces the adjusted balance to $9,655 ($9,700 - $45).
We also need to add the credit memo for interest earned on Oliver's interest-bearing account, which is $50. This increases the adjusted balance to $9,705 ($9,655 + $50).
Finally, we need to subtract the outstanding checks, which total $200. This gives us the true cash balance of $9,505 ($9,705 - $200).
Therefore, the answer is option d) $9,505.
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Calculate how many hours his non-salary employees will take to create a large order of 1,000 shoes. What kind of budget would Jose create?
Answers
This question is incomplete but will answer this based on what I guess you're asking.
Answer and Explanation:
Assume there are 10 employees for the small factory that makes shoes.
Let's assume each non-salary employee spends 30 minutes on each pair of shoes before it finishes, and charges $10 per hour.
1000 pairs of shoes would take 1000×0.5×10= 5000 hours(208 days and a few hours)
Total budget for non-salary employees= 5000 hrs×$10= $50000
Therefore Jose would need a $50000 budget given the variables above.
The marginal cost of a corn farmer in Dormaa has been estimated by a team of agricultural economists from UENR as P=42.0-0.125Q; where P is price of corn(¢/tonne) and Q is the quantity of corn produced (measured in tonnes).
a. determine the equilibrium quantity and price of corn in this market.
b. Assume the application of chemicals on the farm generates some external cost on the nearby fish pond, estimate at 0.05Q. What is the social optimal corn production level if this harm is internalized.
c. Graph the marginal benefit and marginal costs curves and estimate the deadweight loss to society due to the externality.
Answers
a. The given marginal cost is:P=42.0-0.125QTo find the equilibrium quantity and price, set the marginal cost equal to marginal revenue, MR and solve for Q. MR is the derivative of the Total Revenue (TR) function. Since P is price and Q is quantity of corn produced, then total revenue is TR = P x Q.MR = TR'(Q)MR = P + Q(P/ Q)'MR = P - P/ QWe know that MR = MC42.0-0.125Q = P - P/ QSubstitute the value of P into the equation.
42.0-0.125Q = (P/ Q)Q42.0-0.125Q = PThe equilibrium quantity is calculated using Q = 336 tonnes and the equilibrium price is calculated by substituting the value of Q in the marginal cost function as follows.P = 42.0 - 0.125 (336)P = 42.0 - 42P = 0Therefore, the equilibrium quantity and price of corn in the market are Q = 336 tonnes and P = 0.
b. When the externality is internalized, the social optimal corn production level is achieved by setting the marginal cost (MC) equal to the social marginal cost (MSC). Therefore, MSC = MC + External cost = 42.0-0.125Q + 0.05Q = 42.0-0.075QThus, 42.0-0.125Q + 0.05Q = 42.0-0.075QOr, 0.05Q = 0.125Q + 42.0 - 42.0 + 0.075Q = 0.05QQ = 672 tonnesTherefore, the social optimal corn production level is 672 tonnes.
c. The marginal cost and marginal benefit curves are as follows:Marginal Benefit (MB) = 42.0 - 0.125QMarginal Cost (MC) = 42.0 - 0.125Q + 0.05Q = 42.0 - 0.075QAt the equilibrium, Q = 336 tonnesThe deadweight loss (DWL) is calculated as the difference between the social welfare at the social optimal level of output (Qs) and the equilibrium output (Qe) multiplied by the price per unit of output (P).DWL = (1/2) (672 - 336) (42 - 0)DWL = 14,112The deadweight loss to society due to the externality is 14,112.
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a physical count of merchandise inventory on june 30 reveals that there are 244 units on hand. using the average-cost method, the amount allocated to the ending inventory on june 30 is
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To determine the amount allocated to the ending inventory on June 30 using the average-cost method.
Without this information, it's not possible to calculate the exact amount allocated to the ending inventory. The average-cost method involves dividing the total cost of goods available for sale by the total number of units available to calculate the average cost per unit. Then, this average cost per unit is multiplied by the number of units in the ending inventory to determine the value of the ending inventory.
If you provide the cost of goods sold and the total cost of goods available for sale, I would be able to assist you further in calculating the amount allocated to the ending inventory using the average-cost method.
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True or False. Taxpayers with a qualifying home office can compute their home office expense using the actual expense method or the simplified method.
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Taxpayers with a qualifying home office can compute their home office expense using either the actual expense method or the simplified method. This statement is true.
The actual expense method allows taxpayers to deduct the actual expenses associated with their home office, including a portion of their mortgage interest or rent, utilities, insurance, and maintenance costs. To use this method, taxpayers must determine the actual expenses incurred for their home office and calculate the percentage of their home used for business purposes.
Alternatively, the simplified method provides a streamlined approach for calculating the home office deduction. Under this method, taxpayers can deduct $5 per square foot of their home office space, up to a maximum of 300 square feet. This simplified method eliminates the need to track and allocate actual expenses, making it less burdensome for some taxpayers. It's important to note that taxpayers must meet certain requirements to qualify for the home office deduction, including using the space regularly and exclusively for business purposes. Additionally, the deduction for home office expenses is subject to limitations and restrictions, so it's recommended to consult with a tax professional or refer to the IRS guidelines for detailed information.
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How do depreciating assets hurt your financial health?
a. They decrease your net worth.
b. They increase your discretionary spending.
d. They lower your FICO score.
c. They increase your equity.
Answers
Answer:
A
Explanation:
net worth is based on assets and income so if assets decrease your net worth decreases
The GUI is an index used by the OS to manage computer files,
O False
O True
Answers
Answer: I think it's true
whats the biggest risk in starting your own business
Answers
Answer:
Abandoning the steady paycheck. ...
Sacrificing personal capital. ...
Relying on cash flow. ...
Estimating popular interest. ...
Trusting a key employee. ...
Betting on a crucial deadline. ...
Donating personal time (and health).
What is a Capital Gain on an investment?
Money that you are paid for letting others borrow your money for a period of time.
An increase in the number of investment types you add to your portfolio.
Increase in value of an equity investment that is a result of appreciation of that asset.
Money that you are paid as a result of owning stock in a company that is earning a profit.
Answers
Profits from investments are referred to as capital gains. Capital gains are "realized" when investments are sold for more than they were originally purchased, at which point you must pay taxes on the profit.
What exactly are capital gains and how are they taxed?Most investments that are sold after being held for at least a year are subject to capital gains taxes. A Schedule D form is used to record the taxes.
Are capital gains equivalent to income?Based on the source of the profit, capital gains and other investment income are different. Capital gains are the profits made when an investment is sold for more money than it cost to buy it. Investment income is the gain from dividends, interest payments, and capital gains.
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Which reason best demonstrates why flexibility is important in IT work environment?
Answers
Answer:
Changing work environments require employees to adapt quickly to new technology
Explanation:
entities do not pay taxes. rather, owners of these entities pay taxes on income generated by the entities.
Answers
In most cases, entities such as corporations, partnerships, and limited liability companies (LLCs) are separate legal entities from their owners, and as such, they are typically subject to their own set of taxes laws and regulations.
For example, in the United States, corporations are generally subject to federal income tax on their profits, and may also be subject to state and local taxes. However, some types of corporations, such as S corporations, are not taxed at the corporate level, but instead pass through their income, deductions, and credits to their shareholders, who report this information on their individual tax returns.In the case of partnerships and LLCs, these entities are typically treated as pass-through entities for tax purposes. This means that the entity itself does not pay income taxes on its profits; instead, the profits and losses "pass through" to the owners or members, who report them on their individual tax returns.
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Suppose the demand for a product is given by D(p) = – 3p + 187. A) Calculate the elasticity of demand at a price of $17. (Give your answer to three decimal places.) Elasticity =_________
B) At what price do you have unit elasticity? (Round your answer to the nearest penny.) Price = $__________
Answers
A) The elasticity of demand at a price of $17 is -1.323.
B) The price with unit elasticity is approximately $12.33.
1. The demand function is D(p) = -3p + 187.
2. To find the elasticity, we first need the derivative of the demand function with respect to price, which is dD/dp = -3.
3. Now, we'll use the elasticity formula: E = (dD/dp) * (p/D(p)).
4. Plug in the price $17 into the demand function: D(17) = -3(17) + 187 = 136.
5. Calculate the elasticity at $17: E = (-3) * (17/136) ≈ -1.323.
6. For unit elasticity, E = -1, so we have: -1 = (-3) * (p/D(p)).
7. Rearrange and substitute D(p) = -3p + 187: p = -3p + 187.
8. Solve for p: 4p = 187, p ≈ 12.33.
So, at a price of $12.33, the demand has unit elasticity.
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What role do career pathways play?
A. Career pathways lay out the academic courses, skills, and knowledge required for a position.
B. Career pathways help students determine whether a position will have information technology as a primary or secondary focus.
C. Career pathways lay out the advantages and disadvantages of potential careers.
D. Career pathways organize jobs into 16 major groups to help students plan their careers.
Answers
Answer:
I think it's A. but don't depend on me i'm probley wrong
Explanation:
What part do career paths play is The educational requirements, necessary skills, and expertise for a position are outlined in career pathways. As a result, choice (A) is right.
What is meant by Career pathways ?A career path is a list of steps you should take to advance into new or more senior responsibilities at work during your professional life. Employees are guided toward their ultimate professional ambitions as well as their long-term goals through a series of positions and experiences.
By highlighting their existing professional situation and providing advice on how to improve it, career pathing can increase their levels of engagement and job satisfaction.
An essay about your career objectives is a piece of writing in which you describe the career route you hope to take and the goals you have for yourself. You will discuss your career aims, pertinent accomplishments that help you be more successful in achieving your goals, and how your aspirations can help you advance even farther in the essay.
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