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February 28, 2015

Homework Help: Business: Finance

Recent Homework Questions About Finance

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Finance
you have to replace a copy machine and you have 2 offers. both offers 3 year leases. offer 1 requires an up-front payment of $1700 with additional payments of $1200 at the beginning of years 2 and 3. The firm is also charged one-half of 1 cent, ($0.005), for each sheet printed...
Saturday, February 28, 2015 at 7:38am

finance
Below are three different pairs of bonds and their recent yields. Pick one pair (pairs are labebed 1, 2 and 3 below) and 1) explain the primary factors that contribute to making the yields of the two bonds in your pair differ. While there may be a single factor, there will be ...
Wednesday, February 25, 2015 at 2:32pm

Finance
Calculate, to the nearest cent, the future value FV of an investment of $10,000 at the stated interest rate after the stated amount of time. HINT [See Example 1.] 5% per year, compounded daily (assume 365 days/year), after 11 years work:10,000(1+0.05/365)^(365)(11)=17331.&#...
Tuesday, February 24, 2015 at 4:21pm

Finance
the existing or current (spot) 1-, 2-, 3-, and 4-year zero coupon Treasury security rates were as follows: 1R1 = 0.30%, 1R2 = 0.90%, 1R3 = 1.30%, 1R4 = 1.45% Using the unbiased expectations theory, calculate the 1-year forward rates on zero coupon Treasury bonds for years 2, 3...
Monday, February 23, 2015 at 3:39pm

Finance
Silva Motors just paid a dividend of $2, i.e., D0 = $2.00. The dividend is expected to grow by 100% during Year 1, by 50% during Year 2, and then at a constant rate of 5% thereafter. If Silva's required rate of return is rs = 12%, what is the value of the stock today?
Sunday, February 22, 2015 at 2:25pm

Finance
You have been living in the house you bought 6 years ago for $250,000. At that time, you took out a loan for 80% of the house at a fixed rate 25-year loan at an annual stated rate of 9.5%. You have just paid off the 72th monthly payment. Interest rates have meanwhile dropped ...
Thursday, February 19, 2015 at 9:24pm

Finance
You are interested in a new Ford Taurus. After visiting your Ford dealer, doing your research on the best leases available, you have three options. (i) Purchase the car for cash and receive a $1,900 cash rebate from Dealer A. The price of the car is $19,000. (ii) Lease the car...
Thursday, February 19, 2015 at 9:09pm

Finance
You are interested in a new Ford Taurus. After visiting your Ford dealer, doing your research on the best leases available, you have three options. (i) Purchase the car for cash and receive a $1,900 cash rebate from Dealer A. The price of the car is $19,000. (ii) Lease the car...
Thursday, February 19, 2015 at 8:32pm

Finance
You have been living in the house you bought 6 years ago for $250,000. At that time, you took out a loan for 80% of the house at a fixed rate 25-year loan at an annual stated rate of 9.5%. You have just paid off the 72th monthly payment. Interest rates have meanwhile dropped ...
Thursday, February 19, 2015 at 8:25pm

Finance
You have been living in the house you bought 5 years ago for $300,000. At that time, you took out a loan for 80% of the house at a fixed rate 20-year loan at an annual stated rate of 9.0%. You have just paid off the 60th monthly payment. Interest rates have meanwhile dropped ...
Thursday, February 19, 2015 at 5:34pm

Finance
Bob bought an 8.5% annual coupon bond at par. One year later, he sold the bond at a quoted price of 98. During the year, market interest rates rose and inflation was 3%. What real rate of return did Bob earn on this investment?
Thursday, February 19, 2015 at 2:32am

Math
Frank paid very well finance rate of 1.5% on the first $500 and 1% at any amount above $500 how much did he pay at the unpaid balance was $741.23
Tuesday, February 17, 2015 at 1:26am

Finance
After deciding to buy a new car, you can either lease the car or purchase it on a 3-year loan. The car costs $32,000. The lease offer is for $450/month for 36 months, with only $99 due up front. If you buy the car with a 3-year loan, the APR is 7% with monthly compounding. You...
Sunday, February 15, 2015 at 9:19am

Finance
If the APR is 7% with monthly compounding, compute the quarterly rate
Saturday, February 14, 2015 at 1:51pm

Finance
You have an investment with 10 semi-annual cash flows of $1000. The first payment is 6 months from today. If the EAR is 11% what is the present value of this investment?
Saturday, February 14, 2015 at 1:46pm

Finance
Gene's Art Gallery is notoriously known as a slow-payer. The firm currently needs to borrow $27,500 and only one company will deal with them. The terms of the loan call for daily payments of $100. The first payment is due today. The interest rate is 21.9%, compounded daily...
Saturday, February 14, 2015 at 1:45pm

Finance
You just acquired a mortgage in the amount of $249,000 at 6.75% interest, compounded monthly. Equal payments are to be made at the end of each month for 30 years. How much of the first loan payment is interest? (Assume each month is equal to 1/12 of a year)
Saturday, February 14, 2015 at 1:42pm

Finance
You are planning to save for retirement over the next 15 years. To do this, you will invest $1,100 a month in a stock account and $500 a month in a bond account. The return on the stock account is expected to be 7%, and the bond account will pay 4%. When you retire, you will ...
Saturday, February 14, 2015 at 1:40pm

Finance
The Joseph Company has a stock issue that pays a fixed dividend of $3.00 per share annually. Investors believe the nominal risk-free rate is 4 percent and that this stock should have a risk premium of 6 percent. What should be the value of this stock? TO compute, use the ...
Monday, February 9, 2015 at 4:49pm

Corporate Finance
Newcastle auto plc has a current cash flow of 4.4 million and pays no dividends. The Present value of the company ´s future cash flows is 74 million. The company is entirely financed with equity and has 800.000 shares outstanding. Assume the dividend tax is zero. ...
Monday, February 9, 2015 at 4:08pm

personal finance
Hal Thomas wants to establish a savings fund from which a community organization could draw $800 a year for 20 years. If the account earns 3 percent, what amount would he have to deposit now to achieve this goal? (Round time value factors to 3 decimal places and final answer ...
Friday, February 6, 2015 at 5:15pm

Finance
Monthly fee $5, check-processing fee of 20 cents, average of 32 checks written per month. Round the answer to the nearest cent.
Friday, February 6, 2015 at 4:00pm

Finance
If you put $10,000 at the end of each year into a savings account that pays interest at the rate of 5 percent a year, how much would you have after 4 years? Use the Appendix B. Round the answer to the nearest cent. Round FV-factor to three decimal places.
Friday, February 6, 2015 at 3:43pm

Finance
Determine the annual net cost of these checking accounts: a. Monthly fee $4, check-processing fee of 20 cents, average of 23 checks written per month
Thursday, February 5, 2015 at 12:00pm

Finance
Your parents are retired and have expressed concern about the really low interest rates they’re earning on their savings. They’ve been approached by an advisor who says he has a “sure-fire” way to get them higher returns. What would you tell your parents ...
Thursday, February 5, 2015 at 11:48am

Finance
Given an interest rate of 6.25% compounded annually, how much would you accumulate if you started with $3,250 and then contributed $1,950 per year (at the end of each year) for 13 years? Is this correct? Calculate each FV and sum? PV1 = 3,250 i = 6.25% N = 13 FV = PV2 = 1,950 ...
Tuesday, February 3, 2015 at 9:59pm

Finance
Given an interest rate of 6.25% compounded annually, how much would you accumulate if you started with $3,250 and then contributed $1,950 per year (at the end of each year) for 13 years?
Tuesday, February 3, 2015 at 9:00pm

Healthcare finance
You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400,000 Wages and benefits 220,000 Rent 5,000 Depreciation 30,000 Utilities 2,500 Medical Supplies 50,000 Administrative ...
Sunday, February 1, 2015 at 6:41pm

Healthcare finance
You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400,000 Wages and benefits 220,000 Rent 5,000 Depreciation 30,000 Utilities 2,500 Medical Supplies 50,000 Administrative ...
Sunday, February 1, 2015 at 6:39pm

Healthcare Finance
You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400,000 Wages and benefits 220,000 Rent 5,000 Depreciation 30,000 Utilities 2,500 Medical Supplies 50,000 Administrative ...
Sunday, February 1, 2015 at 6:38pm

personal finance
As a college senior, Jessica was offered a new credit card that allowed her to take a 10% discount on the first month's purchases. She accepted the offer and made purchases that totaled $156.19. How much did she owe after the discount was deducted from the $156.19?
Thursday, January 29, 2015 at 3:43pm

Finance
The Health Corp issued an 12%, 15 yr bond 5 yrs ago. At the time of issue the bond's par value was $1,000. Comparable bonds are yielding 10% today. What must Health Corp's bond sell for in today's market to yield 20% (YTM) to the buyer? Assume bond pays interest ...
Wednesday, January 28, 2015 at 8:11pm

personal finance
Which type of tax is calculated on a per-item basis?
Wednesday, January 28, 2015 at 4:50pm

Finance
Assume personal income was $28 million last year. Personal outlays were $20 million and personal current taxes were $5 million. a. What was the amount of disposable personal income last year? Disposable personal income (DPI) = personal income – personal current taxes DPI...
Wednesday, January 28, 2015 at 3:42pm

f
You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 35-year mortgage for 85 percent of the $3,100,000 purchase price. The monthly payment on this loan will be $17,200. What is the APR on this loan? What is the EAR on this loan?
Wednesday, January 28, 2015 at 3:04pm

history
where did the united states get the most of the money to finance world war 1
Tuesday, January 27, 2015 at 9:17pm

Education/college
I had to create some learning goals for a personal Finance course (I am pretending to teach. I have these learning goals that I need to make less ambiguous. Can you help me? Balance a checkbook Understanding the banking process Identify pros and cons of credit cards Assess ...
Saturday, January 24, 2015 at 3:06pm

Finance
A speculator sells a stock short for $70 a share. The company pays a $2 annual cash dividend. After a year has passed, the seller covers the short position at $60. What is the percentage return on the position (excluding the impact of any interest expense and commissions)? ...
Tuesday, January 20, 2015 at 12:47am

Finance
A bond that has a $1,00 par value (face value)and a contract or coupon interest rate of 10.1 percent. Interest payment are $50.50 and are paid semiannually. The bonds have a current value $1,125 and will mature in 10years. The firms marginal tax rate is 34 percent.
Saturday, January 17, 2015 at 1:18am

Finance
A bond that has a $1,00 par value (face value)and a contract or coupon interest rate of 10.1 percent. Interest payment are $50.50 and are paid semiannually. The bonds have a current value $1,125 and will mature in 10years. The firms marginal tax rate is 34 percent.
Friday, January 16, 2015 at 11:54pm

Finance
1. Following is the projected net income stream associated with the use of Zartek technology. (Note: this net income stream does not take into account that Zartek’s owners invested $2,000 to develop Zartek in Year 0.) Globus Maximus Enterprises would like to buy the ...
Sunday, December 28, 2014 at 5:58pm

Math and Finance
If May invests $5,000 compounded annually at 8%, how much money will she have at the end of 8 years?
Sunday, December 28, 2014 at 3:10pm

Personal finance
A 10 year bond has a coupon rate of 7% annually and a principal payment of $1000.00. Other similar bonds are paying 9% annually. To determine the value of this bond you must find the interest factors, IF at: A) 9% for 10 periods b) 9% for 20 periods c) 4.5% for 20 periods d) 4...
Sunday, December 28, 2014 at 12:34pm

finance
which of the following investments paid the highest rate of return? (a) a corporate bond that paid $72 per year in interest and that cost $600 to purchase (b) a money market fund that paid 8 percent interest (c) a corporate stock that cost $40 to buy and that paid dividends of...
Sunday, December 21, 2014 at 12:30pm

finance
A young couple was involved in a multi-level marketing business for a number of years under the wife’s name. The husband used his money and made a loan of RM 20000(about 6000 US dollar) from an Islamic bank to start the business. The profit gained from the business is ...
Friday, December 19, 2014 at 10:06pm

Finance
Cash Equation: Bettendorf Corporation has a book net worth of $17,800. The company's long-term debt is $6,900. Its net working capital, excluding cash, is $1,600. Its fixed assets are $21,300. How much cash does the company have? If the current liabilities are $2,575, what...
Wednesday, December 17, 2014 at 3:50pm

Finance
Due to a recession, expected inflation this year is only 2.75%. However, the inflation rate in Year 2 and thereafter is expected to be constant at some level above 2.75%. Assume that expectations theory holds and the real risk-free rate is r* = 3%. If the yield on 3-year ...
Monday, December 15, 2014 at 5:31pm

Finance
Fjord Luxury Liners has preferred shares outstanding that pay an annual dividend equal to $7 per year. If the current price of Fjord preferred shares is $94, what is the after-tax cost of preferred stock for Fjord?
Thursday, December 11, 2014 at 3:22pm

Finance
Your great aunt Mary passed away and left you and inheritance of $5,000.00. Since you don't have a need for the money in the near future, which of the following would be the best place to put the $5,000.00? a) a savings account earning 1% interest b) a checking account c) ...
Thursday, December 11, 2014 at 3:07pm

Finance
You were hired as a consultant to Giambono Company, whose capital structure is 40% debt, 15% preferred stocks, and 45% common stock equity. The after-tax cost of debt is 6.00%, the cost of preferred stocks is 7.50%, and the cost of common stock equity is 13.00%. What is its WACC?
Thursday, December 11, 2014 at 12:44pm

Finance math
Consider the project with the following expected cash flows: Year Cash flow 0 -$400,000 1 $100,000 2 $120,000 3 $850,000 •If the discount rate is 0%, what is the project's net present value? •If the discount rate is 2%, what is the project's net present value...
Tuesday, December 9, 2014 at 5:27pm

finance
A stock has a beta of 2.0. A security analyst who specializes in studying this stock expects its return to be 24%. Suppose the risk-free rate is 6 percent and the market-risk premium is 10 percent. Is the stock overvalued or undervalued relative to the market’s ...
Monday, December 8, 2014 at 9:58pm

Finance
A family purchased a new ski boat for $20,000. The loan agency required a down payment and financed the balance for 36 months with an APR of Determine the total finance charge and monthly payment for the loan.
Sunday, December 7, 2014 at 3:56pm

business finance
Your client is 40 years old, and she wants to begin saving for retirement, with the first payment to come one year from now. She can save RM5,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 9 percent in the ...
Friday, December 5, 2014 at 4:24am

business finance
You want to buy a small house that costs RM100,000. You have RM10,000 for a down payment and repaid in equal installments at the end of each of the next 3 years. The interest rate is 7 percent compounded annually. a. Calculate how much you need to pay for each year. b. Set up ...
Friday, December 5, 2014 at 4:19am

Finance
Jessie purchased a notebook for $10,500 using a credit card. She considers two repayment plans. i She makes the minimum monthly payment of $300 offered by the credit card and no other charges are applicable. ii She makes monthly payments of $900 and no other charges are ...
Thursday, December 4, 2014 at 9:51am

Finance
A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 45% of sales. Indirect incremental costs are ...
Wednesday, December 3, 2014 at 7:06pm

Finance
3. Given the following information for Janicek Power Co., find the WACC. Assume the company’s tax rate is 35%. Debt: 8,500 7.2% coupon bonds outstanding, $1000 par value, 25 years to maturity, selling for 118% of par; the bonds make semiannual payments Common Stock: 225,...
Tuesday, December 2, 2014 at 2:12pm

IT
The No Interest Credit Company provides zero-interest loans to customers. Design an application that gets customer account data, including an account number, customer name, and balance due. Output the account number and name, then output the customer's projected balance ...
Thursday, November 27, 2014 at 9:26am

Finance
Western Corporation’s stock was $10 per share when purchased, and is now at $14 per share. The company made $1 million in after-tax income and there are 500,000 shares outstanding. What is the capital gain per share?
Tuesday, November 25, 2014 at 11:10pm

finance
The countries of Stabilato and Variato have the following average returns and standard deviations for their stocks, bond, and short-term government securities. What range of returns should you expect to earn 95 percent of the time for each asset class if you invested in ...
Tuesday, November 25, 2014 at 4:02pm

Finance
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. (Round your answers to the nearest cent.) $200 balance, 14%, $50 payment (a) previous balance ...
Saturday, November 22, 2014 at 1:32am

Advanced Finance
6. (TCO F) Suppose the December CBOT Treasury bond futures contract has a quoted price of 80-07. What is the implied annual interest rate inherent in the futures contract? Assume this contract is based on a 20-year Treasury bond with semiannual interest payments. The face ...
Friday, November 21, 2014 at 6:13pm

Finance
Baako has invested $75,000 in a trust fund at 9% for his child's college education. His child will draw $30,000 per year for four years, starting at the end of year 7. What will be the amount that will be left over in the education fund at the end of year 10, just after ...
Wednesday, November 19, 2014 at 7:26pm

Finance
You have just started your first job and you want to have the basic appliances (fridge, washer, dryer, etc.) in your apartment. You face the following choices: (i) Purchase all appliances at the store using a bank loan. There is no down payment as the bank can take your ...
Wednesday, November 19, 2014 at 7:24pm

Finance
Dominique has just turned 65 and she has deposited her annual payment of $20,000 into her retirement account. She made her first such saving deposit into this fund on her 35th birthday. Dominique has also retired and wants to figure out how much money she has in her retirement...
Wednesday, November 19, 2014 at 7:22pm

Finance
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. How much must you invest each month in a mutual fund yielding 13.5% compounded monthly to become a millionaire in 10 years? (Round ...
Saturday, November 15, 2014 at 11:01pm

finance
the joseph company has a stock issue that pays a fixed dividend of 3.00 per share annually. Investors believe the normal rik-free rate is 4 percent and that this stock is 14 percent,and that this stock should have a risk premium of 6 percent
Friday, November 14, 2014 at 11:17pm

business finance
A young couple was involved in a multi-level marketing business for a number of years under the wife’s name. The husband used his money and made a loan of RM 20000(about 6000 US dollar) from an Islamic bank to start the business. The profit gained from the business is ...
Friday, November 14, 2014 at 8:48am

Finance
Are investors and speculator activities necessary to the system of production, or could businesses function just fine without them? Because I feel like sometimes businesses dont really have to resort to having to sell portions of there business to investors and stuff...
Thursday, November 13, 2014 at 5:40pm

finance
Suppose that an insurance agent offers you a policy that will provide you with a yearly income of $50,000 in 30 years. What is the comparable salary today, assuming an inflation rate of 6% compounded annually? (Round your answer to the nearest cent.)
Thursday, November 13, 2014 at 3:48pm

Question Finance
November 21, 2009, was the day of a tragic fire in the MGM Grand Hotel in Las Vegas. At the time of the fire, the hotel had only $30 million of liability insurance. One month after the fire, the hotel bought an extra $170 million of liability coverage for a premium of $37.5 ...
Thursday, November 13, 2014 at 12:44pm

finance
November 21, 2009, was the day of a tragic fire in the MGM Grand Hotel in Las Vegas. At the time of the fire, the hotel had only $30 million of liability insurance. One month after the fire, the hotel bought an extra $170 million of liability coverage for a premium of $37.5 ...
Thursday, November 13, 2014 at 12:24pm

finance math
Meg's pension plan is an annuity with a guaranteed return of 7% interest per year (compounded annually). She would like to retire with a pension of $30000 per annum for 15 years. If she works 31 years before retiring, how much money must she and her employer deposit per ...
Wednesday, November 12, 2014 at 9:27pm

Can some one check my finance answers please
Which of the following best states the difference between seed capital and startup capital? Seed capital is for research and planning while startup capital is for operating expenses. Seed capital is provided by venture capitalists while startup capital is provided by banks. ...
Wednesday, November 12, 2014 at 8:36pm

Finance
Which of the following best states the difference between seed capital and startup capital? Seed capital is for research and planning while startup capital is for operating expenses. Seed capital is provided by venture capitalists while startup capital is provided by banks. ...
Wednesday, November 12, 2014 at 6:14pm

finance
Which of the following statements is true for a stock that sells now for $66.9, pays quarterly dividend of $1.20, and experienced a 25% return on investment over the past year? Its price one year ago was:
Tuesday, November 11, 2014 at 10:01pm

finance
What is the percentage return on a stock that was purchased for $43.00, paid quarterly dividends of $1.25, and was then sold after one year for $40.50?
Tuesday, November 11, 2014 at 10:00pm

BTEC Level 3 Business
I need to find out what information the finance and marketing departments need and use within a business.
Monday, November 10, 2014 at 12:59pm

math
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded and that the month is 30 days long Balance: $200 Rate: 18% Payment: $50 Method: Adjusted balance
Monday, November 10, 2014 at 9:20am

Finance
I am expected to pay a dividend of $5.10 year for the next for years. If the current price of my stock is $31.67, and my equity cost of capital is 15% what price would I expect my stock to sell for at the end of four years?
Sunday, November 9, 2014 at 10:26pm

Finance
what is the internal rate of return for an initial outlay of $10,500 resulting in a single cash inflow of $19,932 in 11 years?
Sunday, November 9, 2014 at 10:09pm

Math
A family purchased a new ski boat for $20,000. The loan agency required a down payment and financed the balance for 36 months with an APR of Determine the total finance charge and monthly payment for the loan.
Sunday, November 9, 2014 at 8:57pm

Finance
Here's another way to look at it. Suppose you want to borrow $100,000. You choose a 30-year fixed rate loan at 7.5%, and pay one discount point ($1,000), a 1% origination fee ($1,000), and $350 in other fees. Although the lender is giving you a loan for $100,000, you have ...
Saturday, November 8, 2014 at 11:42am

Math
Larry purchased a ski lodge in Telluride for $850,000. His bank is willing to finance 70% of the purchase price. As part of the mortgage closing costs, Larry had to pay 4% discount points. How much did this amount to?
Thursday, November 6, 2014 at 1:05pm

Finance
If you open an IRA at a commercial bank and deposit $1000 in the account per year, how much will be in the account after 20 years if the funds earn 7%?
Wednesday, November 5, 2014 at 11:08am

Finance
2. Jamie Thompson is thinking about investing in some residential income-producing property that she can purchase for $200,000. Jamie can either pay cash for the full amount of the property or put up $50,000 of her own money and borrow the remaining $150,000 at 8% interest. ...
Sunday, November 2, 2014 at 11:01pm

Need help by tonite Finance
15. Bond ratings and prices A corporate bond with an 8.5 percent coupon has 10 years left to maturity. It has had a credit rating of A and a yield to maturity of 10 percent. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BBB. ...
Sunday, November 2, 2014 at 2:33pm

Need help by tonite Finance
4. Liquidity Premium Hypothesis Suppose we observe the following rates: 1R1 = 8 percent, 1R2 = 10 percent, and E(2r1) = 8 percent. If the liquidity premium theory of the term structure of interest rates holds, what is the liquidity premium for year 2, L2?
Sunday, November 2, 2014 at 2:32pm

Need help by tonite Finance
3. Unbiased Expectations Theory One-year Treasury bills currently earn 5.50 percent. You expect that one year from now, one-year Treasury bill rates will increase to 5.75 percent. If the unbiased expectations theory is correct, what should the current rate be on two-year ...
Sunday, November 2, 2014 at 2:31pm

Need help by tonite FINANCE
2. Interest rates A two-year Treasury security currently earns 5.25 percent. Over the next two years, the real interest rate is expected to be 3.00 percent per year and the inflation premium is expected to be 2.00 percent per year. What is the maturity risk premium on the two-...
Sunday, November 2, 2014 at 2:30pm

Finance
Wheel Industries is considering a three-year expansion project, Project A. The project requires an initial investment of $1.5 million. The project will use the straight-line depreciation method. The project has no salvage value. It is estimated that the project will generate ...
Sunday, November 2, 2014 at 5:30am

Finance
Honey well international zero coupon bonds par value $1000 mature on April 21, 2012. Calculate the yield to maturity if an investor purchased one of these bonds on April 21, 2006, at a price of $650.
Friday, October 31, 2014 at 1:26pm

FINANCE
12. Bond Quotes Consider the following bond quote: a municipal bond quoted at 101.25. If the municipal bond has a par value of $5,000, what is the price of the bond in dollars?
Friday, October 31, 2014 at 2:18am

FINANCE
10. Bond prices and interest rate An 8 percent coupon bond with 15 years to maturity is priced to offer a 9 percent yield to maturity. You believe that in one year, the yield to maturity will be 6.5 percent. What is the change in price the bond will experience in dollars? (...
Friday, October 31, 2014 at 2:17am

FINANCE
8. Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1 = 5 percent, E(2r1) = 6 percent, E(3r1) = 7.5 percent E(4r1) = 6.85 percent Using the ...
Friday, October 31, 2014 at 2:16am

FINANCE
8. Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1 = 5 percent, E(2r1) = 6 percent, E(3r1) = 7.5 percent E(4r1) = 6.85 percent
Friday, October 31, 2014 at 2:16am

FINANCE
7. Forecasting interest rates Assume the current interest rate on a one-year Treasury bond (1R1) is 5.50 percent, the current rate on a two-year Treasury bond (1R2) is 5.95 percent, and the current rate on a three-year Treasury bond (1R3) is 8.50 percent. If the unbiased ...
Friday, October 31, 2014 at 2:15am

FINANCE
6. On May 23, 2014, the existing or current (spot) one-year, two-year, three-year, and four-year zero-coupon Treasury security rates were as follows: 1R1 = 4.55 percent, 1R2 = 4.75 percent, 1R3 = 5.25 percent, 1R4 = 5.95 percent Using the unbiased expectations theory, ...
Friday, October 31, 2014 at 2:15am

FINANCE
5. Forecasting Interest Rates Assume the current interest rate on a one-year Treasury bond (1R1) is 5.00 percent, the current rate on a two-year Treasury bond (1R2) is 5.75 percent, and the current rate on a three-year Treasury bond (1R3) is 6.25 percent. If the unbiased ...
Friday, October 31, 2014 at 2:14am

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