Answer:
Explanation:
one-year forward rate for year 2:
(1+4.75%)(1+f)=(1+4.95%)^2
(1+4.75%)(1+f)=1.10145025
(1+F)=1.10145025/1.0475
(1+f)=1.0515
f= 5.15%
one-year forward rate for year 3
:
(1+4.95%)^2 (1+f)=(1+5.25%)^3
(1+4.95%)^2 (1+f)=1.16591345312
(1+f)=1.16591345312
/1.10145025
(1+f)=1.0585
f=5.85%
one-year forward rate for year 4
:
(1+5.25%)^3 (1+f)=(1+5.65%)^4
(1+f)=1.0685
f= 6.85%
Answer:
We will plant 165 of Crop A
Explanation:
We will compare the marginal contribution for each crop: A B
Profit: 170.00 210
cost of cultivating: 40.00 60
CM per constrain 4.25 3.50
Crop A is better regarding cultivating cost.
Now we analize the labor hours:
Profit: 170 210
Labor hours per crop 20 25
CM per constrain 8.50 8.40
Because Crop A is better at both constrain resource It will be better to plant only Crop A if possible. As assigning to Crop B will diminish the return on the scarce resourse.
We will see how much can we plant of Crop A
7400 / 40 = 185
3300 / 20 = 165
We will plant 165 of Crop A
which is the maximun we can plant at the given labor hours.
Answer:
Bond Price = $149.1136446 million rounded off to $149.11
Explanation:
To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,
Coupon Payment (C) = 180 million * 0.08 * 6/12 = 7.2 million
Total periods (n) = 20 * 2 = 40
r or YTM = 0.1 * 6/12 = 0.05 or 5%
The formula to calculate the price of the bonds today is attached.
Bond Price = 7.2 * [( 1 - (1+0.05)^-40) / 0.05] + 180 / (1+0.05)^40
Bond Price = $149.1136446 million rounded off to $149.11
