Suppose that the market interest rate increases to 6.875 percent annually compounded (increase by 87.5 basis points) during the first year of your purchase (within year 1), and it remains at that level (6.875 percent) for the next five years. Assume that, the reinvestment rate for the first coupon payment is the new interest rate, that is, 6.875 percent annually compounded. In addition, you will reinvest the coupon payments in a zero-coupon bond. [You already computed total proceeds (both from reinvestment of coupon payments plus face value) at the end of your investment horizon (t=6) years in Part B of the problem.] Now, what is your annually compounded holding period return (HPR) at the end of your investment horizon (t=6) years?

Answers

Answer 1

The annually compounded holding period return (HPR) at the end of the investment horizon (t=6) years is 6.98%

Par value =1000 Number of years =6 Coupon = Coupon Rate × Par value = 7% × 1000 =70 Rate(r) =6%

Therefore, the price of the bond at year 0 will be:

= 70 × (1-(1+6%)⁻⁶)/6% )+ 1000/(1+6%)⁶

= 1049.17

Then, the reinvestment rate will be =6.875%

Number of years of coupons =6

The future value of reinvestment of the coupon and the receipt of par value at year 6 will be:  

= 70 × ((1+6.875%)⁵)/6.875% )+ 1000

= 1499.16

Therefore, the HPR at the end of Year 6 will be:

= (1499.16/1000)^(1/6 )- 1

= 6.98%

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Related Questions

hola ¡antes estaba como ruedanatalia222 nose que paso se me borro la cuenta los puntos los corazon los seguidores las CORONAS ¡¡¡:( estoy muy triste :( :(

Answers

Answer:

borro la cuenta los puntos los corazon

Explanation:

How does money function as a medium of exchange?
O A. It has a value that is set and changed by the government.
O B. It can be used to compare the value of different products.
C. It allows people to buy, sell, and trade goods efficiently.
D. It can be made of paper, metal, or many other materials.

Answers

Answer:

C. It allows people to buy, sell, and trade goods efficiently

Answer: C, it allows people to more easily buy and sell products

Explanation:

7) Using a fictional product or service, create a simple business plan by
answering the three questions business owners must consider.

The three questions a business owners must consider are;

1 What good will be produced?
2 How should it be produced?
3 For whom should it be produced?

What good will you produce, or what service will you provide?

Answers

Answer:

i will make legos

It will be produced in a production facility in denmark

will be produced for all genders ages 5+

Explanation:

Using a fictional product, my simple business plan would be based on these economic theories that is what to produce, how to produce and for whom to produce.

What to produce – I will produce herbal hair shampoo.How to produce – I would use both labor intensive and machine incentive techniques equally for production.Whom to produce- The core niche would be the women aged between 15 to 60.

What is a business plan?

A business plan is a written strategy that outlines the objectives and strategies for accomplishing the objectives of the business. It describes a company's go-to-market strategy, financial forecasts, market analysis, corporate objectives, and mission statement. The business plan may also include a timeframe and information about key personnel who are in charge of reaching the objectives.

A business plan is a crucial document intended for both internal and external audiences of a company. For instance, before a business has built a solid track record, a business plan is utilized to entice investment. Securing financing from financial entities might also be beneficial.

A business plan serves three purposes: it explains the organization's strategy to execute it over the long term, obtains funding from investors, and aids in projecting future company demands.

What is an economic theory?

An economic theory is a body of concepts and precepts that describes how various economies operate. An economist may use theories in many ways depending on their specific function. For instance, some theories seek to explain certain economic phenomena, such inflation or supply and demand, as well as the reasons behind them.

Economic theories seek to analyze the causes and effects of economic occurrences, as well as the optimal course of action for influencing or resolving them. They are an extensive set of presumptions, theories, definitions, and guidelines on what should be done in various economic circumstances. Positive and normative approaches to economic theory are the two main categories.

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Which two are segments in a Marketing Plan? (Choose two)

Demographic


Psychographic


Income


Loyalty

Answers

The two segments that are part of a Marketing Plan are: A. Demographic and B. Psychographic segments.

A marketing plan details a company's target market, the brand's value proposition, the marketing campaigns, and the evaluation metrics for assessing if marketing initiatives are effective and inefficient.

In the marketing plan, the target market is usually segmented to enable the marketing efforts to yield good results.

The four major segments are:

DemographicPsychographicGeographicBehavioral.

The "demographic" segment classifies the target market based on age, gender, or race.  On the hand, "psychographic" segmentation dwells on consumers' activities, interests, and opinions, which go beyond the demographic classification.

Thus, the two segments that are part of the Marketing Plan are demographic and psychographic, while income and loyalty are ingredients in the segments.

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Answer: Demographic

Psychographic

Explanation:

what is professonal education?​

Answers

Answer:" Professional education is a formalized approach to specialized training in a professional school through which participants acquire content knowledge and learn to apply techniques. Although content is what the participant is expected to learn by attending professional school, such an education also helps the participant acquire the competencies needed for proper practice and behavior."

Explanation:

Eggs, toilet paper, and candy bars are examples of __________.
A.
Specialty goods
B.
Convenience goods
C.
Shopping goods
D.
Unsought goods

Answers

Answer:

I think c

Explanation:

u can get it all from a store

Answer:

B. Convenience goods

Explanation:

Edge 2021

A client has several suppliers they purchase their materials from, and most of the suppliers require part or all payments to be made at the time of order. You advise your client to set up a Prepayments account that can be reconciled each month. How should this account be set up

Answers

Analyzing the above scenario, the customer should set up an asset account called prepayment, which is an item described in the balance sheet as a current asset and liability, as this will be a financial resource available for future use.

A prepayment asset account is therefore configured as an expense previously paid, but which has not yet occurred, being this a facility for companies to pay their suppliers at the time of the order in a previously scheduled manner.

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Jerry Allison starts the month with a balance on his credit card of $1,070. On the 10th day of the month, he purchases $390 in clothes with his credit card. On the 15th day of the month, he makes a payment on his credit card of $550. Jerry's interest rate is one and a half percent for the month. Jerry's bank calculates the finance charge on their credit card by using the previous balance method. What would Jerry's finance charges be for the month?
a. $11.17
b. $7.80
c. $13.18
d. $21.90
e. $16.05

Answers

Answer:

b. $7.80

Explanation:

hope it help you

EAR versus APR [LO4] Two banks in the area offer 30-year, $220,000 mortgages at 5.5 percent and charge a $3,500 loan application fee. However, the application fee charged by Insecurity Bank and Trust is refundable if the loan application is denied, whereas that charged by I.M. Greedy and Sons Mortgage Bank is not. The current disclosure law requires that any fees that will be refunded if the applicant is rejected be included in calculating the APR, but this is not required with non fundable fees (presumably because refundable fees are part of the loan rather than a fee). What are the EARs on these two loans? What are the APRs?

Answers

Answer:

application fee. However, the application fee charged by Insecurity Bank and Trust is refundable if the loan application is denied, whereas that charged by I.M. Greedy and Sons Mortgage Bank is not. The current disclosure law requires that any fees that will be refunded if the applicant is rejected be included in calculating the APR, but this is not required with non fundable fees (presumably because refundable fees are part of the loan rather than a fee). What are the EARs on these two loans? What are the APRs?

Jamal is creating a four-fold brochure about the parts of a business including production, finance, marketing, and customer service. If he only wants to highlight the key aspects of each part with several bullet points, what information should he include? Briefly explain why you feel this is the most important information about each part of a business.

Answers

If Jamal is creating a four-fold brochure about the parts of a business including production, finance, marketing, and customer service If he only wants to highlight the key aspects of each part with several bullet points, the information  he should  include will be:

Jamal should carry out adequate and accurate research concerning the vital information that should be included  in the brochure.

The information that he should include in his brochure should be:

He should include relevant information that the customers need in the brochure.

He should show professionalism or he should show how professional he his when it has to to with his business.

He should highlight the most important aspect of the business such as the company products and services.

He shown reveal the purpose and objective of the business including what the business stand for.

The reason why i feel this is the most important information about each part of a business is because it will enables people to know that he is good at what he does  which will in turn help to promote the business.

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A hair salon acquired 100 new customers last year. Cost in the marketing and sales were as follows:



Marketing Costs = $ 1,000

Sales Costs = $ 10,000

Salaries = $ 96,000



What was the customer acquisition cost?

Answers

If a hair salon acquired 100 new customers last year. Cost in the marketing and sales were are marketing Costs  $1,000, Sales Costs $10,000  and Salaries $96,000.What the customer acquisition cost will be is $1,070

Using this formula

Customer acquisition cost=Sales costs+ Marketing costs +Salaries ÷ Number of customers acquired

Where:

Marketing Costs =$1,000

Sales Costs = $10,000

Salaries = $96,000

Number of customers acquired=100

Let plug in the formula

Customer acquisition cost=$1,000+$10,000+$96,000÷100

Customer acquisition cost=$107,000÷100

Customer acquisition cost=$1,070

Inconclusion if a hair salon acquired 100 new customers last year. Cost in the marketing and sales were are marketing Costs $1,000, Sales Costs $10,000  and Salaries $ 96,000. What the customer acquisition cost will be is $1,070

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Answer:

The answer is $10 dollars

Explanation:

I took a test and got it right

2. If information is disseminated, what happens to it?

A) It is altered
B) It is distributed
C) It is destroyed
D) It is stored

Answers

Answer:

b

Explanation:

by definition, disseminate means to distribute or broadcast information

is Labor is a type of human resource.

Answers

yes! labor is a type of human resource.

Which of the following characterize a manager as being efficient?

Answers

Explanation:

They use a minimum amount of resources for the amount of outputs produced.

what are two examples of ways an electronic record may be disturbuted to others?

Answers

Answer:

Way 1. Email, Way 2. Publish on Internet

As a business owner, explain the importance of scanning the internal and external environment of a business.

Answers

Answer:

1. Identification of strength

2.identificationof weakness

3. Identification of opportunity

4. Identification of threat

5. Optimum of use of resources

Justine heard that an Australian newspaper has just published a very interesting article about the koala bear, her favorite animal. Justine is most likely to find this article online, as the internet allows for quick access to which type of news?

Select one:

a.
local news


b.
world news


c.
honest news


d.
entertainment news

Answers

I think the correct answer is B. World news I’m not sure

I WILL MARK BRAINLIEST!!!
The best way to make yourself valuable to your employers is to learn _____.
A) How to do your job only
B) How to do multiple jobs
C) How to avoid doing work
D) How to avoid embarrassment

Answers

Answer:

D. How to avoid embarrassment

Hope im correct im from philippines please greet me :))

Answer:

its d

Explanation:

edge 2023

Under what circumstancess should outsourcing be used for building Information systems​

Answers

Answer:

FOR LIFE INSURANCE DENSITY

Mohamed earned a 5 on his Advanced Placement® American History exam. How might this benefit him when he gets to college? His job will give him additional money toward college tuition. He will automatically earn a scholarship to the college of his choice. He will receive the lowest interest rates on student loans. The college he attends may give him college credit for the course.

Answers

By earning a 5 on the Advanced Placement® American History exam, Mohammed might benefit when he gets to college in a way that "The college he attends may give him college credit for the course."

This is because the credit earned on Advanced Placement can be used by the college Muhammed attends to determine whether he can skip some introductory courses or even graduate early.

This implies that colleges give value to the credit earned in Advanced placement.

The higher the scores earned, the more a student can benefit when he gets to college.

It is believed that high-performing students in Advanced Placement understand some introductory courses well or can take more courses at a time.

Hence, in this case, it is concluded that the correct answer is option D. "The college he attends may give him college credit for the course."

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7. Valuing semiannual coupon bonds Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly. Assume that a $1,000,000 par value, semiannual coupon US Treasury note with five years to maturity has a coupon rate of 6%. The yield to maturity (YTM) of the bond is 9.90%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note: $849,059.88 $721,700.90 $534,907.72 $1,018,871.86 Based on your calculations and understanding of semiannual coupon bonds, complete the following statement: The T-note described in this problem is selling at a .

Answers

The value of the Treasury note is $849,059.88 and this is selling at a discount.

The value of a treasury note depends on different factors such as:

The initial valueThe coupon rateThe value of the yield to maturity

Considering these aspects, let's calculate the value of the treasury note

Initial value: $1,000,000

$1,000,000 x 6% (coupon rate) =  $60,000

$60,000 / 2 (the coupon pays twice a year) = $30,000 - This value refers to the payment per period

Let's consider now the number of periods and the yield to maturity

Number of periods: 5 x 2 (the number of periods double) = 10 periods

Yield to maturity or rate: 9.90% / 2 (cash flow decreases by half) = 4.95%

Finally, you can use the PV formula to calculate the value:

PV (4.95%,10,-30000,-1000000) - This part is done in excel program as the original formula is quite complex

PV =$849,059.88

Based on this, the value of the note is $849,059.88, and you can conclude this is selling at a discount because this value is lower than the initial value of 1,000,000.

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If you are an HR Manager , which among these rating sources do you believe in the most crucial?

Answers

Answer:

behaviour

Explanation:

his\her behaviour to collegues matters more for good environment in business

The December 31, 2021, adjusted trial balance of Business Solutions (reflecting its transactions from October through December of 2021) follows. Number Account Title Debit Credit 101 Cash $ 48,372 106 Accounts receivable 5,668 126 Computer supplies 580 128 Prepaid insurance 1,665 131 Prepaid rent 825 163 Office equipment 8,000 164 Accumulated depreciation—Office equipment $ 400 167 Computer equipment 20,000 168 Accumulated depreciation—Computer equipment 1,250 201 Accounts payable 1,100 210 Wages payable 500 236 Unearned computer services revenue 1,500 301 S. Rey, Capital 73,000 302 S. Rey, Withdrawals 7,100 403 Computer services revenue 31,284 612 Depreciation expense—Office equipment 400 613 Depreciation expense—Computer equipment 1,250 623 Wages expense 3,875 637 Insurance expense 555 640 Rent expense 2,475 652 Computer supplies expense 3,065 655 Advertising expense 2,753 676 Mileage expense 896 677 Miscellaneous expenses 250 684 Repairs expense—Computer 1,305 901 Income summary 0 Totals $ 109,034 $ 109,034 Required: 1. Prepare an income statement for the three months ended December 31, 2021. 2. Prepare a statement of owner's equity for the three months ended December 31, 2021. Hint: The S. Rey, Capital account balance was $0 on October 1, and owner investments were $73,000 this period. 3. Prepare a classified balance sheet as of December 31, 2021. 4. Record the closing entries as of December 31, 2021. 5. Prepare a post-closing trial balance as of December 31, 2021.

Answers

The income statement, statement of owner's equity for the three months, classified balance sheet, record of the closing entries, and the post-closing trial balance have all been prepared for Business Solution, as shown in the images attached below, as of Dec. 31, 2021. (See attachment).

1. Question 1 is the income statement of Business Solution for the period of three month ended Dec. 31st, 2021 prepared to determine the net income which is equal to $14,460.

The net income is arrived at as follows:

Net income = Total Revenue less Revenue Expenses

2. Question number two deals with the owners equity, as at Dec. 21st, 2021, which is equal to $80,360.

Owner's Equity is arrived at as follows:

Capital + Net Income - Withdrawal

3. Question 3 refers to the Balance Sheet of Business Solution as at Dec. 31st, 2021.

The Balance Sheet is statement of affairs, that shows the financial positions of a business.

The Balance Sheet has 2 parts, the assets and the liabilities.

The assets refers to what the business owns, financed by the liabilities.

The total assets of Business Solution, as at Dec. 31st, 2021 equals $83,460.Owner's equity + Liabilities = total assets, i.e. $83,460.

4. Question 4 gives summary of the closing entries of Business Solution as at Dec. 31st, 2021.

The closing entries shows the balances remaining in the books of accounts after all adjustments have been made.

5. Question 5 shows the post trial balance of Business Solution as at Dec. 31st, 2021.

The post-trial balance is the least of all balances remaining in the books of accounts extracted on Dec. 31st 2021 after all adjustments have been made.

The totals, that is debit and credit of the trial balance equals $105,964.

In summary, the income statement, statement of owner's equity for the three months, classified balance sheet, record of the closing entries, and the post-closing trial balance have all been prepared for Business Solution, as shown in the images attached below, as of Dec. 31, 2021. (See attachment).

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What is organizing in business management

Answers

Answer:

Organizing involves assigning tasks, grouping tasks into departments, delegating authority, and allocating resources across the organization. ... Before a plan can be implemented, managers must organize the assets of the business to execute the plan efficiently and effectively.

A good interpreter will be :_________.
A. bilingual, familiar with both business cultures, and employed by one of the businesses.
B. bicultural, bilingual, and familiar with both business cultures.
C. bicultural and an employee of the visiting business.
D. bicultural, bilingual, and employed by the host business.

Answers

Answer:

i would say A. sry if it's wrong :(

Explanation:

Why is a tariff imposed

Answers

impose tariffs to raise revenue or to protect domestic industries

what is the best way to move up and down on your computer srceen?

Answers

Answer:

your scroll wheel or pg up or pg down button

Explanation:

I probably think the up ⬆️ and down ⬇️arrows or you can even use the mouse

According to the guidelines of good journalism, which of the following is correct:

O Her birthday is March 10
O Her birthday is Mar. 10
O Her birthday is march 10
O Her birthday is mar. 10

Answers

The first answer is correct

Answer:

Her birthday is March 10 plz Mark me as brainlliest

identify the two forces causing globalization to expand

Answers

Answer:

Factors influencing Globalization are as follows: (1) Historical (2) Economy (3) Resources and Markets (4) Production Issues (5) Political (6) Industrial Organisation (7) Technologies. Globalisation though is basically an economic activity, is influenced by many factors.

The two most important driving forces of globalization is the decline in barriers between nations meaning the increase level of export/import and sharing between nations and countries around the world. Globalization Is A Major Driving Force Commerce

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What is the recovery period and depreciation method of a residential rental property located in a foreign country which was placed in service after December 31, 2017?

Answers

Answer: For residential rental property, the recovery period using GDS is 27.5 years. 2 If you use ADS, the recovery period for the same type of property is 30 years if it was placed in service after December 31, 2017, or 40 years if it was placed in service before that date.

Explanation: Is the good enough???

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