Suppose that you buy a 1-year maturity bond with a coupon of 7% paid annually. If you buy the bond at its face value, what real rate of return will you earn if the inflation rate is 4%

Answers

Answer 1

Answer:

the real rate of return is 2.88%

Explanation:

The computation of the real rate of return is shown below:

As we know that

Real rate of return is

= {(1 + nominal rate of return) ÷ (1 - inflation rate)} - 1

= {(1 + 0.07) ÷ (1 + 0.04)} - 1

= 2.88%

Hence, the real rate of return is 2.88%

We simply applied the above formula so that the correct value could come

And, the same is to be considered  


Related Questions

Which are Career and Technical Student Organizations? (Check all that apply.)
Business Professionals of America
American Association of School Administrators
American Chemical Society
UDECA
Future Business Leaders of America
FFA
Skills USA
FCCLA
Will give brainliest! 50 points!!!

Answers

Answer:

Answer:

Business Professionals of America

American Association of School Administrators

DECA

Future Business Leaders of America

Explanation:

Hope it helps your question!

Answer:

A,B,D,E

Explanation:

ABC company had 8,000 in accounts receivable on Dec. 31, 2019. However, the company estimated that 2,000 of them would become bad debt. The company recorded the 2,000 as bad debt. What is the impact on the financial statement?

Answers

Answer:

Net income is reduced by 2,000 and the net value of receivables on balance sheet reduced by 2,000

Explanation:

Since it is given that there is $8,000 in account receivable out of which $2,000 would be estimated and recorded as a bad debt

So here the bad debt expense is recorded that means the expenses are increased that ultimately reduced the net income also at the same time the amount of receivable would also decreased by $2,000

Therefore the same is to be considered

Which of the following best explains how the rise of machinery created an unfriendly relationship between industrialists and their employees?
A. The industrialist earned his income from the work of others.
B. There was a lack of unions.
C. The employees were underpaid.

Answers

Answer:

C

Explanation:

In as much as these are the only options given, then there has to be an answer there. Even though I fancy there being another answer.

But I'd say, the closest to the reason from the aforelisted is that the employees were underpaid. Since the advent of machineries, truth is that there wasn't going to be need for employees. This is because machines tend to have a much better output, better efficiency and won't need to be paid monthly in wages.

Since there isn't need for employees again, the industrialist tend to underpay the employees because they don't see their useful in the first instance

The rise of the use of machine is on the increase. The best explanation as to how the rise of machinery created an unfriendly relationship between industrialists and their employees is the employees were underpaid.

The industrialists did treat their workers bad.  They make sure to keep wages as low as ever. Their attitude towards their employee was like if employee did not like the pay, the long hours and other working conditions he could quit and go to other places.

They were super-rich, living in great homes, living life lavishly abut their employees were paid little sum as if they do not have any choice.

Learn more about Industrialist from

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Renoir Associates has declared a​ $49,000 cash dividend to shareholders. The company has​ 4,000 shares of ​$16​par, ​6% preferred stock and​ 11,000 shares of ​$16par common stock. The preferred stock is noncumulative. How much will be distributed to the preferred and common stockholders on the date of​ payment?

Answers

Answer:

Preferred stock dividend is paid our before common dividends are paid out. Preferred dividends are;

= 4,000 * 16 * 6%

= $‭3,840‬

Common Stock Dividends

= 49,000 - ‭3,840‬

= $‭45,160‬

In a monopolistically competitive industry, price:______

a. is most likely a bit higher than the competitive market price because of the cost of variety.
b. will exceed the monopoly price due to the destructiveness of competitive forces.
c. will be lower than the competitive price due to cost savings.
d. is contingent on the behavior of other firms because they are mutually interdependent.

Answers

Answer:

a

Explanation:

In a monopolistically competitive industry, price is most likely a bit higher than the competitive market price because of the cost of variety.

In a monopolistically competitive market, firms tend to set their prices to be higher than those of the marginal cost. This invariably translates to the fact that market is never really able to be productively efficient.

Firms in monopolistically competitive markets tend to wield the same power, since they're all price makers, they have a low degree of market power.

11. Paying off a consumer loan prior to its maturity Paying Off Installment Loans Some installment loans include terms that charge a penalty if the borrower pays off the loan earlier than its maturity date. The specific terms can vary so it’s important to know if a loan you’re considering provides for a prepayment penalty and if it does, what its exact terms are. A common way to compute a penalty is the sum-of-the-digits method. You and your friend recently took out installment loans. You expect to pay off your loan before its maturity date, so you made sure that the contract: Provides for the use of the Rule of 78s Does not contain a prepayment penalty clause Provides for the use of the sum-of-the-digits method Your friend didn’t anticipate being able to pay off the loan before its maturity date—until he won a lot of money in the lottery, enough to pay it off. He decided to pay off the loan today rather than invest his winnings. What’s the most likely reason why? The loan contract would use the sum-of-the-digits method to compute interest if your friend paid off the loan before its maturity date. The interest rate on the loan is lower than the rate of return your friend would earn on his investment. The contract does not contain a prepayment penalty clause. True or False: Computing interest using the sum-of-the-digits method allocates more interest at the beginning of a loan than at the end of the loan. True or False

Answers

I believe it’s True hope this helps

When operating in a constrained environment, which products should be produced? a. products with the highest contribution margin per unit b. products with the highest contribution margin per unit of the constrained process c. products with the highest selling price d. products with the lowest allocated joint cost

Answers

Answer: B. products with the highest contribution margin per unit of the constrained process.

Explanation:

When operating in a constrained environment, the products that should be produced are the products with the highest contribution margin per unit of the constrained process.

This is essential for the company to maximize its total contribution margin. This in turn will help the company in realizing revenue and also maximizing profit.

The amount of loss (lower profit or higher cost) from not making the best decision for each state of nature is known as:______.a. best payoff.
b. opportunity loss.
c. risk profile.
d. utility.

Answers

Answer:

b. opportunity loss.

Explanation:

The opportunity loss means the loss that arises by taking the difference between the profit i.e. optimal and the actual payoff received for a specific decision. It could occurred at the time when the best alternative is not picked up.

Therefore according to the given options, the option b is correct as it meets the criteria given in the question

Hence, all the other options are incorrect

Harrold is the project manager for his organization and he has seven people on his project team. Who is responsible for executing the project plan and creating the project deliverables?A. Project lead.B. Project manager and the project team.C. Project manager.
D. Project team.

Answers

Answer: D. Project team

Explanation:

The project team is responsible for executing the project plan and creating the project deliverables. They are also in charge of contributing to the success of the project by making sure that the project objectives are achieved.

Each team mate has a specific role that he or she is assigned and the team should execute the tasks assigned to them successfully.

Magee Company's stock has a beta of 1.20, the risk-free rate is 4.50%, and the market risk premium is 5.00%. What is Magee's required return

Answers

Answer:

10.50%

Explanation:

Calculation for Magee's required return

Using this formula

Required return=Risk-free rate+Beta(Market risk premium)

Let plug in the formula

Required return= 4.50% + 1.20(5.00%) .

Required return=4.50%+6%

Required return= 10.50%

Therefore Magee's required return will beb10.50%

In a single period system, the target ________ is the balancing point between shortage costs and excess costs.

Answers

Answer: service level

Explanation:

A single period inventory model typically occurs to the organizations that order one-time items. In this case, such organizations can only get the right quantity when they order once in order to prevent loss.

In a single period system, the target service level is the balancing point between shortage costs and excess costs.

The PE ratio: Assuming Net Income for the year is $250,000, what is the net cash flows from operating activities given the following information: Increase in Salaries Payable $ 19,500 Depreciation Expense $ 9,500 Increase in Prepaid Rent $ 27,500 Loss on sale of asset $ 1,250 Increase in Accounts Payable $ 29,500 Increase in Inventory $ 93,000 Multiple Choice

Answers

Answer:

Net operating cash flow = $189,250

Explanation:

Particulars                                    Amount$

Net income                                    250,000

Add:depreciation expense           9,500

Add:loss on sale of asset              1,250

Add:increase in salary payable    19,500

Less:increase in prepaid rent       (27,500)

Add:increase in AP                        29,500

Less:increase in inventory            (93,000)

Net operating cash flow              $189,250

The combination of debt financing and equity financing that maximizes a firm's value is known as its:

Answers

Answer:

optimal capital structure

Explanation:

optimal capital structure can be regarded as a combination of

of debt and equity financing which brings about maximization of amarket value in a firm. It should be noted that optimal capital structure is the combination of debt financing and equity financing that maximizes a firm's value.

A stock has a beta of 1.2. Suppose the expected market risk premium (EMRP) is 6% and the risk-free rate is 1%. What is this stock's expected return according to the CAPM

Answers

Answer:

7%

CAPM = 1% + [6% - 1%](1.2) = 1% + 6% = 7%

Find the equivalent taxable yield of the municipal bond for tax brackets of zero, 10%, 20%, and 30%, if it offers a yield of 4.50%

Answers

Answer and Explanation:

The computation of the equivalent taxable yield is shown below:

For zero = 4.50%

For 10% =  4.50 ÷ 0.90 = 5%

For 20% =  4.50 ÷ 0.80 = 5.625%

For 30% =  4.50 ÷ 0.70 = 6.43%

For 10%, for 20% and for 30% it would reduced the tax brackets by the same

like

for 10%

= 1 - 0.10

= 0.90

The Same applied for other ones

Therefore the above should be the answer

If the European subsidiary of a U.S. firm has net exposed assets of 750,000 Euros, and the euro drops in value from $1.30/euro to $1.20/ Euro the U.S. firm has a translation:__________

a. gain of $75,000
b. loss of $75,000
c. gain of $65,000
d. loss of 546,923

Answers

The correct answer is:

b. loss of $75,000

An investor can invest money with a particular bank and earn a stated interest rate of 8.80%; however, interest will be compounded quarterly. What are the nominal (or stated), periodic, and effective interest rates for this investment opportunity? Interest Rates Nominal rate 8.80% Periodic rate 6.12% Effective annual rate 9.00%

Answers

Answer:

nominal interest rate = 8.8%

periodic interest rate = 2.2%

the effective interest rate = 9.09%

Explanation:

nominal interest rate is the rate given to the investor = 8.8%

periodic interest rate = nominal interest rate / total number of compounding periods per year = 8.8% / 4 = 2.2%

the effective interest rate = (1 + periodic interest rate)ⁿ - 1 = (1 + 8.8%/4)⁴ - 1 = (1 + 8.8%/4)⁴ - 1 = (1 + 2.2%)⁴ - 1 = 1.0909 - 1 = 0.0909 = 9.09%

You use ________________ to communicate a risk and the resulting impact.A. risk management plansB. CBAsC. risk statementsD. POAMs

Answers

Answer:A

Explanation:

I believe the answer is: A.

Because the others don’t sum up to the problem. Hope this helps! :)

What would be the approximate expected price of a stock when dividends are expected to grow at a 25% rate in each of years 2 and 3, and then grow at a constant rate of 5% if the stock's required return is 13% and next year's dividend will be $4.00?

Answers

Answer:

$68.64

Explanation:

Div₁ = $4

Div₂ = $5

Div₃ = $6.25

Div₄ = $6.5625

the terminal value at year 3 = Div₄ / (Re - g) = $6.5625 / (13% - 5%) = $82.03

P₀ = $4/1.13 + $5/1.13² + ($6.25 + $82.03)/1.13³ = $88.28/1.13³ = $68.64

pencer Co. has a $300 petty cash fund. At the end of the first month the accumulated receipts represent 553 for delivery expenses, $167 for merchandise inventory, and $22 for miscellaneous expenses. The fund has a balance of $58. The journal entry to record the reimbursement of the account includes a:_________.a) Debit to Petty Cash for $300. b) Debit to Cash Over and Short for $58 c) Credit to Cash for $242 d) Credit to Inventory for $167e) Credit to Cash Over and Short for $58.

Answers

Answer:

c) Credit to Cash for $242

Explanation:

Petty cash, beginning = $300

Delivery expense = $53

Merchandise inventory = $167

Miscellaneous expense = $22

Petty cash, Ending = $58

The journal to record the reimbursement of the accounts will be:

Event    Account Title and Explanation   Debit    Credit

1           Delivery expense                            $53  

           Merchandise inventory                   $167  

           Miscellaneous expense                  $22

                    Cash                                                   $242

Naomi complains to Andy that he "hasn’t been here – until now, when we’re in crisis mode." Based on this statement, Andy is most likely viewed as a(n) ________ leader by Naomi.

a. passive management by exception
b. active management by exception
c. transformational
d. laissez-faire
e. contingent reward

Answers

Answer: a. passive management by exception

Explanation:

Even though this might sound like it is laissez-faire leadership, it is not.

This is a passive management by exception leadership style and a leader that does this is usually inactive and absent from their duties unless mistakes are being made or crisis are popping up that need to be fixed. They will then spring into action to mitigate the adverse effects of their absence.

This is different from laissez-faire leadership because in laissez-faire, the leader is simply absent even during crisis.

Based on the given statement, it is the passive management by exception that leader by Naomi.

The following information should be considered related to the  passive management by exception :

In this, the leader is not active also it is absent from the duties until the mistakes should be made or the crisis should be popping up the requirement to be fixed. After this, there is the transformation of the spring into action for decreasing the opposite impacts.

Therefore we can conclude that the correct option is a.

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Zebco Inc is evaluating a project that has a cost of $1,000 and will produce end-of-year net cash inflows of $500 per year for 3 years. The required rate of return for this project's is 10 percent. The difference between the project's IRR and its MIRR is closest to:_________.
a. 5.09%
b. ​5.75%
c. ​4.31%

Answers

Answer:

a. 5.09%

Explanation:

initial outlay = -$1,000

cash flow 1 = $500

cash flow 2 = $500

cash flow 3 = $500

the simplest way to determine the IRR and MIRR is to use an excel spreadsheet and the IRR and MIRR functions:

IRR = 23.38%

in order to us the MIRR formula, we must use the 10% rate as both financing and reinvestment rates.  

MIRR = 18.29%

difference between them = 23.38% - 18.29% = 5.09%

who developed the revealed preference theory?
In economics

Answers

Answer:

In 1938 Samuelson presented revealed preference theory as an alternative to utility theory, while in 1950, Samuelson took the demonstrated equivalence of the two theories as a vindication for his position, rather than as a refutation.

Answer:

Samuelson developed the revealed preference theory.

At an output level of 17,500 units, you have calculated that the degree of operating leverage is 3.26. The operating cash flow is $78,000 in this case. Ignore the effect of taxes. What will be the new degree of operating leverage for 18,500 units and 16,500 units? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) DOL at 18,500 units DOL at 16,500 units

Answers

Answer:

DOL at 18,500 = 2.91 DOL at 16,500 = 3.78

Explanation:

First find out the Contribution margin per unit and the fixed costs to enable you calculate the profit for the 18,500 units and the 16,500 units.

DOL = Contribution Margin/ Profit

3.26 = Contribution Margin/ 78,000

Contribution Margin = 3.26 * 78,000

= $254,280

Per unit = 254,280/17,500 = $14.53

Fixed Costs = Contribution - Profit

= 254,280 - 78,000

= $176,280

DOL at 18,500 units.

Profit = (14.53 * 18,500) - fixed costs of $176,280

= $92,525

DOL = Contribution/ Profit

= (14.53 * 18,500) / 92,525

= 2.91

DOL at 16,500 units.

Profit = (14.53 * 16,500) - 176,280

= $63,465

DOL = (14.53 * 16,500) / 63,465

= 3.78

Donnegan Company reported operating expenses of $325,000 for 2020. The following data were extracted from the company’s financial records: 12/31/19 12/31/20 Prepaid Expenses $ 60,000 $69,000 Accrued Expenses 210,000 255,000 Accounts Payable 300,000 350,000 On a statement of cash flows for 2020, using the direct method, cash payments for operating expenses should be:___________.

Answers

Answer:

cash payments for operating expenses should be $329,000

Explanation:

Cash Payments for operating expenses is included in the Cash Flow from Operating Activity Section of the Statement of Cash Flows when the Direct Method of preparing this statement is selected.

This is calculated as follows :

Cash Payments for operating expenses

Operating expenses                                                               $325,000

Adjustment of changes in Working Capital

Increase in Prepaid Expenses ($69,000 - $ 60,000)              $9,000

Increase in Accrued Expenses ($255,000 - $210,000)        $45,000

Increase in Accounts Payable ($350,000 - $300,000)       ($50,000)

Cash payments for operating expenses                              $329,000

A portfolio has 70 shares of Stock A that sell for $30 per share and 125 shares of Stock B that sell for $17 per share. (a) What is the portfolio weight of Stock A?(b) What is the portfolio weight of Stock B?

Answers

Answer:

Portfolio weight of Stock A=49.70%

Portfolio weight of Stock A=50.29%

Explanation:

Calculation for the portfolio weight of Stock A and Stock B

First step is to calculate the total amount invested in both portfolio weight of Stock A and Stock B

Stock A and Stock B Total amount invested=

(A 70 shares*$30 per share)+ (B 125 shares*$17 per share)

Stock A and Stock B Total amount invested=$2,100+$2,125

Stock A and Stock B Total amount invested=$4,225

Now let calculate the PORTFOLIO WEIGHT OF STOCK A

Using this formula

Portfolio weight of Stock A=Stock A/Stock A and Stock B Total amount invested

Let plug in the formula

Portfolio weight of Stock A=(70 shares*$30 per share)/$4,225

Portfolio weight of Stock A=$2,100/$4,225

Portfolio weight of Stock A=0.4970*100

Portfolio weight of Stock A=49.70%

Therefore the Portfolio weight of Stock A

will be 49.70%

Calculation for PORTFOLIO WEIGHT OF STOCK B

Using this formula

Portfolio weight of Stock B=Stock B/Stock A and Stock B Total amount invested

Let plug in the formula

Portfolio weight of Stock B=(125 shares*$17 per share)/$4,225

Portfolio weight of Stock B=$2,125/$4,225

Portfolio weight of Stock B=0.5029*100

Portfolio weight of Stock B=50.29%

Therefore the Portfolio weight of Stock will be 50.29%

Why would an e-mail rule memo like this work better as an innovation-driven company such as Tesla rather than at a manufacturing-driven company such as General Motors

Answers

Answer:

An e-mail rule memo like this work better as an innovation-driven company such as Tesla rather than at a manufacturing-driven company such as General Motors is discussed below in details.

Explanation:

The general motor is a very large business in each department with numerous tiers of hierarchy. then departments of the hierarchy are likely to report each other. the company's overall structure is very bureaucratized. one of the disadvantages is that when it comes to decision making and policymaking. General Motors are a slow-moving business. However, this bureaucracy is required by the big organizational structure to keep it together.

Tesla is a business that is younger and relatively lower than General motors because of this general motor funds are likely to be lacking but they are agile and that is their benefit.

An e-mail rule is a rule that determines the better way to mail the messages formally or informally. Tesla is a business that is younger and relatively lower than General motors because of this general motor funds are likely to be lacking but they are agile and that is their benefit.  

The reason e-mail rule memo works better as compared to innovation-driven is:

 

The general motor holds a very large economic activity in each department with numerous tiers of hierarchy and then these departments of the hierarchy are likely to report each other,  the company's overall structure is very bureaucratized.

One of the disadvantages of this is that when it comes to decision making and policymaking. General Motors are a slow-moving business.

However, this bureaucracy is required by the big organizational structure to keep it together.

To know more about the general motors and the tesla motors, refer to the link below:

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If the net present value of a project is positive (non-zero), then the project's:________.a) PI will be less than 1. b) internal rate of return will exceed its required rate of return. c) costs exceed its benefits. d) discounted payback period will exceed the life of the project. e) payback period must equal the life of the project.

Answers

Answer:

b) internal rate of return will exceed its required rate of return.

Explanation:

The internal rate of return is the discount rate at which the NPV = 0. If the NPV is positive when calculated using the project's discount rate, then the IRR is going to be higher than the discount rate.

Option A is wrong because the profitability index (PI) of a project is calculated by dividing the present value of its cash flows by its cost. If the NPV is positive, it means that the present value of its cash flows will be greater than the costs, so the pI will be more than 1.

Option C is wrong because if the costs exceed the benefits, then the NPV will be negative.

Option D is wrong because that would mean that the NPV is negative.  

Option E is something made up that doesn't make any sense.

(Cost of debt) Sincere Stationery Corporation needs to raise $500,000 to improve its manufacturing plant. It has decided to issue a $1,000 par value bond with a 14 percent annual coupon rate and a 10-year maturity. The investors require a 9 percent rate of return. a. Compute the market value of the bonds. b. What will the net price be if flotation costs are 10.5 percent of the market price?

Answers

Answer:

a. $1,320.88

b.  $1,182.19

Explanation:

The computation is shown below:

a. For market value of the bond

Given that

Rate = 9%

NPER = 10

PMT = $1,000 * 14% = $140

FV = $1,000

The formula is shown below:

= -PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $1,320.88 i.e. equivalent to the market value of the bonds

b. Now the net price be

= Market price × (1 - flotation cost)

= $1,320.88 × (1 - 0.105)

= $1,182.19

A simple random sample of 700 individuals provides 200 Yes responses. a. What is the point estimate of the proportion of the population that would provide Yes responses (to 2 decimals)? b. What is your estimate of the standard error of the proportion (to 4 decimals)? c. Compute the 95% confidence interval for the population proportion (to 4 decimals).

Answers

Answer and Explanation:

A. The point estimate of individuals that would provide yes responses is the sample proportion. The sample proportion is calculated by dividing number of yes responses by sample size:

p = x/n = 200/700= 0.2857

B. The standard error of the population is the square root of the product of the point estimate and it's complement divided by the sample size given by

√p(1-p)/n

=√0.2857(1-0.2857)/700= 0.0170

C. For confidence level 95%, z score is calculated 1-0.95= 0.05/2= 0.025

Z score checked under the table = 1.96

Boundaries=

P-1.96 *standard error and p+1.96 *standard error

= 0.2857-1.96*0.0170= -0.25238

=0.2857+1.96*0.0170= 0.31902

Note : BODMAS demands we multiply first in the above calculation before subtraction or addition.

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