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Lesechka [4]
2 years ago
5

YIELD CURVE FOR ZERO COUPON BONDS RATED AA Maturity YTM Maturity YTM Maturity YTM 1 year 8.00 % 7 year 9.15 % 13 year 10.45 % 2

year 8.11 % 8 year 9.25 % 14 year 10.65 % 3 year 8.20 % 9 year 9.35 % 15 year 10.75 % 4 year 8.50 % 10 year 9.47 % 16 year 10.95 % 5 year 8.75 % 11 year 9.52 % 17 year 11.00 % 6 year 8.85 % 12 year 9.77 % 18 year 11.25 % Assume that there are no liquidity premiums. To the nearest basis point, what is the expected interest rate on a four-year maturity AA zero coupon bond purchased six years from today
Business
1 answer:
Fudgin [204]2 years ago
3 0

Answer:

10.41%

Explanation:

Calculation for the expected interest rate on a four-year maturity

Expected interest rate=[(1+.0947)^10 ÷1+.0885)^6 ]^1=4-1

Expected interest rate=[(1.0947)^10÷(1.0885)^6 ]^1/4-1

Expected interest rate=[(2.47÷1.66)^1/4]-1

Expected interest rate=(1.486^1/4)-1

Expected interest rate=1.1041-1

Expected interest rate=0.1041*100%

Expected interest rate=10.41%

Therefore the expected interest rate on a four-year maturity AA zero coupon bond purchased six years from today will be 10.41%

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masya89 [10]

Answer:

DL, DM, and VOH.

Explanation:

Under the variable costing method, direct labor cost, direct material cost and variable manufacturing overhead cost are cost assigned to the product. administrative, fixed manufacturing overhead cost are not variable cost and hence cannot be assigned to a product under variable costing method. Variable costing methods considers only manufacturing costs that change in total with changes in production level.

3 0
1 year ago
Dividends on CCN corporation are expected to grow at a 9% per year. Assume that the discount rate on CCN is 12% and that the exp
cricket20 [7]

Answer:

P14 = $55.69545045394  rounded off to  $55.70

Explanation:

The constant growth model of dividend discount model (DDM) can be used to calculate the price of the stock today. DDM calculates the price of a stock based on the present value of the expected future dividends from the stock. The formula for price today under constant growth DDM is,

P0 = D1 / (r - g)

Where,

  • D1 is the dividend expected in Year 1 or next year
  • g is the constant growth rate in dividends
  • r is the discount rate or required rate of return

To calculate the price of the share today, we use the dividend that is expected next year or in Year 1. Thus, to calculate the price of the share 14 years from now, we use use D15. The D15 can be calculated as follows,

D15 = D1 * (1+g)^14

D15 = 0.50 * (1+0.09)^14

D15 = $1.67086351362  rounded off to  $1.67

Now using the equation for Price as provided by the DDM model,

P14 = 1.67086351362 / (0.12 - 0.09)

P14 = $55.69545045394  rounded off to $55.70

6 0
1 year ago
Members of the buying center at Kid's World, a store for children's clothing, are drawing up a list of desired supplier attribut
expeople1 [14]

Answer:

C) supplier selection

Explanation:

The five stages of the business buying decision process are:

  1. Awareness and recognition: someone at the company identifies the need for a purchase.
  2. Specification and research: a detailed specification about what product is needed, quantity and technical requirements is elaborated. Using this information you start to search for potential vendors or suppliers that can offer the product.
  3. Request for proposals: vendors are contacted and you request them to send you their proposals regarding the products that you are looking for.
  4. Evaluation of proposals: the buying team must evaluate the proposals received form the potential vendors and select the most appropriate one.
  5. Order and review process: Price ans selling terms are negotiated, he order is placed and finally the products received are controlled to check that they meet the specifications.
4 0
1 year ago
Melon Lawn Co. advertises its new XJ200 lawn mower. Salespersons describing the XJ200 on behalf of Melon Lawn describe it as a "
kramer

Answer:

<em>c. puffery</em>

Explanation:

Puffery happens when <em>advertisers are trying to encourage people across different techniques to purchase  a product or service.</em>

A business can send an amusing advertisement about its product,  contrast the product to a similar item, mention product details,  or make broad statements about the product that can not be proven to be true.

7 0
1 year ago
People of lower socioeconomic status are more likely to smoke tobacco, but the data collected does not indicate why. However, wi
Stells [14]

Answer:

Option A "Qualitative" is the right option.

Explanation:

  • Qualitative approaches usually involve data analysis models and techniques from some kind of wide range of functional professional disciplines.
  • This same occurrence we were also willing to take part though is that smoker's behavior patterns with a relatively low socio-economic designation have been qualitative. Individual qualities as well as other qualities are indeed qualitative research.

And the above response is the appropriate one.

5 0
1 year ago
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