Answer:
<em>3.57% per Annum or 0.0357</em>
Explanation:
Recall that,
By Taking a long position in two of the 4% coupon bonds and a short position in one of the 8% coupon bonds it results in the following
The Year 0: 90- 2 x 80 = -70
The Year 10: 200- 100 = 100
Since both coupons cancel each other.
In 10 years time a $100 will be the same to $70 today.
The 10-year rate, R, (10-year-rate) is given as,
The rate is 1/10 in 100/70 =0.0357 or 3.57% per year.
.
Answer:
E
Explanation:
Since the annual coupon, that is the discount enjoyed on this service is higher for A than B that is 9% against 7%. Bond A's capital gains yield is greater than Bond B's capital gains yield.
Answer:
d. $13.00
Explanation:
contributon margin = selling price - variable cost
sales price: $25 per unit
<u>list of variable cost:</u>
Direct mateirals 6.20
Direct labor 2.80
variable overhead 1.45
sales commisions 1.00
adminsitrative variable<u> 0.55 </u>
total variable cost 12.00
$25 selling price per unit - $12 variable cost per unit =
$13 contribution margin per unit
This is the amount each units "contributes" to ay the fixed cost and make a gain during the period.
