hich of the following is not a correct statement? ST US govt debt instrument is called Treasury bill. LT US govt debt instrument includes Treasury note with maturity up to 10 years and Treasury bond with maturity up to 30 years. ST refers to maturity up to 3 years. LT corporate debt instrument is called corporate bond. Bond is the term for LT debt instruments in general.
Q: You plan to retire in 45 years and would like to be able to spend $4,000 a month (at the end of…
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…
Q: Compound interest at the end of 8 years. with a principal amount of 10,000 and an annual intrest…
A: This is a case of compounding. The final amount is obtained after compounding the principal amount.
Q: financial structure, capital structure and capitalization
A: Financial structure, capital structure and capitalization have the not same meaning. A capital…
Q: You complete a runs test on daily data for a thinly traded stock and the Z statistic is -5.13. If…
A: Solution: 5. Take neither a long or short position in the stock. Explanation: The Z statistic…
Q: A bond pays P342 interest per year and has face value of P9,806 at the end of 14 years, when it has…
A: Face Value = P9,806 Time Period = 14 years Coupon (PMT) = P342 Interest Rate = 0.15
Q: What is the bond's yield to maturity, with annual compounding?
A: Information Provided: Coupon rate = 3% (semi-annual payments) Period = 18 months or 1.5 years Price…
Q: man borrowed some money from a private at 5 % simple interest per annum. He landed this money to…
A: Simple interest is very simple that means there is only interest on the principal amount and there…
Q: Suppose that on January 1 you have a balance of $5600 on a credit card whose APR is 17%, which you…
A: Part 1 Balance $ 5,600.00 APR 17% Time Period (Year) 1 Part 2 Loan $…
Q: Our textbook claims that one of the key services banks provide is maturity intermediation: what…
A: The banks act as intermediaries between the people with the money and those that need money.…
Q: Harriet Marcus is concerned about the financing of a home. She saw a small cottage that sells for…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: How can a good credit score help you obtain the job you want?
A: Credit scores are given by the credit agencies based on the credit habits of the borrower and how he…
Q: Convert 2.27% compounded monthly to an equivalent interest rate compounded quarterly. Round the…
A: More is the compounding than more is the effective interest rate and less is compounding than less…
Q: eBook A company's 5-year bonds are yielding 9% per year. Treasury bonds with the same maturity are…
A: Data given: Yield of 5 year corporate bond=9% Yield of 5 year treasury bond=4.2% Risk free…
Q: Jose now has $100. How much would he have after 8 years if he leaves it invested at 5% with annual…
A: Future Value refers to the compounded value of a single cash flow received today or multiple cash…
Q: If the required reserve ratio is 15%, currency in circulation is $400 Billion, checkable deposists…
A: The money multiplier refers to the changes which can be affected the value of money deposits up to…
Q: Zinc Company is currently trading for $30 per share. The stock pays no dividends. You are interested…
A: As per the given information: Current trading price - $30 per shareZinc Company Pays no…
Q: IF YOUR GRANDMA WISHES TO PROVIDE P40,000.00 TO YOUR YOUNGEST BROTHER ON HIS 21st BIRTHDAY. HOW MUCH…
A: As per the given information: Future value or accumulated value - P40,000 Payment frequency - Every…
Q: On your tenth birthday, you received $300 which you invested at 4.5 percent interest, compounded…
A: Initial investment (I) = $300 Interest rate (r) = 0.045 Worth now (AV) = $756 Period taken for $300…
Q: Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation…
A: Solution:
Q: Which item of the income statement represents the taxable income of the firm? EBIT…
A: Taxable income is the income after deducting all the expenses in the business, before applying tax…
Q: Suppose you bought a house for 30,000,000 by paying 10% down payment. Make Amortization table by…
A: Present value of annuity Annuity is a series of periodic equal payment over a specified period. With…
Q: Jill has to decide between receiving either a) $12,000 now or b) $15,000 five years later. If the…
A: Given The rate of interest is 6 ¾ %. Term is 5 years
Q: Ubu Manufacturing Company is purchasing a production facility at a cost of $40 million. The company…
A: Net present value = Present value of cash flows - Initial investment Present value of cash flows =…
Q: Why do insurance companies, both life and property and casualty, invest large amounts in money…
A: Money market Securities: - Money market securities includes commercial paper, certificates of…
Q: Lauren deposits: • $240 at the beginning of year 1; $220 at the beginning of year 2; • $100 at the…
A: We have a series of cash flows that needs to be accumulated till 3 years after the last investment.…
Q: A stock has an expected return of 15.2 percent, the risk-free rate is 3.4 percent, and the market…
A: As per CAPM model, expected return = risk free rate + beta*market risk premium
Q: Matty Kim, an accountant for Vernitron, earned $120,900 from January to June. In July, Matty earned…
A: Given, Matty Kim earning from January to June = $120,900. Matty Kim earning in July = $20,000. Tax…
Q: A corporation issues a bond with a par value of $9,000 in one year. Assume that the bond is sold…
A: Interest Amount= Current Value x Rate of Interest x Period in Years Interest Amount = Maturity Value…
Q: For hedging purpose, a client is of the opinion that the delta normal method is the most appropriate…
A: Delta normal Method:- This method is used for the portfolio's that are linearly dependent on the…
Q: riel uses Payback method for capital budgeting. t = 0 cash flow of -$1050 followed with t=1 $400,…
A: Payback period is the period with in which initial investment is recovered. It means the time period…
Q: 37. If the semi-strong form of efficient market hypothesis does not fully hold, then active…
A: A semi strong form of efficiency market theory assumes that the current price has already…
Q: Which of the items below are typically ASSETS for a commercial bank? (Select all that apply; three…
A: Commercial banks refer to the financial institution who is providing services to their customers…
Q: Both Bond Sam and Bond Dave have 12.8 percent coupons, make semiannual payments, and are priced at…
A: a. Percentage change in price if the interest rate rises by 3%: The table provides the calculation…
Q: Bond's face value. Term years. Coupon payment = $240 current interest rates 5% = 2 = a) Present…
A: Timing and quantum of cash flows emanating from a bond are known. We have to find the present value…
Q: For Rebound Tourism Inc. Per share Price=$40Investment cost for 100 shares=$40×100=$4,000 Please…
A: Refer to the condition highlighted in orange color:
Q: nterpret a Laspeyres price index of 116.67. A. Holding quantity constant in the base year, the…
A: Laspeyres price index- This price index is used to measure the change in the price of basket of…
Q: or most companies primary source of income is investment income. True False
A: Companies do the business to earn income and also invest surplus income in other sources to increase…
Q: The Wonder Company uses only the IRR method for capital budgeting. Suppose it is considering a…
A: Initial Cost = -$93 Cash Flow in Year 2 = $108
Q: Beryl's Iced Tea currently rents a bottling machine for $54,000 per year, including all maintenance…
A: The NPV of a project is used to find out the profitability of the project by discounting future cash…
Q: The real risk-free rate is 2.5% and inflation is expected to be 2.75% for the next 2 years. A 2-year…
A: Information Provided: Real risk-free rate = 2.5% Inflation = 2.75% Return on Treasury security…
Q: Pamela made a profit of $3250 after selling stocks for $10500 after 4 years. What was her average…
A: Profit (P) = $3,250 Sale price (SP) = $10,500 Period (n) = 4 Years First we will calculate purchase…
Q: The Berry Corporation stock price changes from $99 at the beginning of 2022 to $72 at the end of…
A: Dividend = $3 Price at the beginning = $99 Price at the end = $72
Q: teslas Bond rating bad?
A: Rating of the bonds are done by rating agecies and rating is done based on credit and default risk…
Q: Security Returns if State Occurs State of Economy Probability of State of Economy Roll Ross Bust .60…
A: There are two states of economy possible. Two different stocks have two different possible returns…
Q: Which of the following is true? O The convenience yield is strictly positive. O The convenience…
A: Convenience yield is the implied return when an ivestor holds any consumption asset such as…
Q: Toni Torres wants to save $1,300 in the next two years to use as a down payment on a new car. If her…
A: Solution:- When an equal amount is saved each period at end of period, it is called ordinary…
Q: a random variable has the following probability distribution 20% chance of realizing a value of 500…
A: Coefficient of variation measures the level of dispersion of data from expected return. It is…
Q: Broussard Skateboard's sales are expected to increase by 15% from $8.8 million in 2019 to $10.12…
A: Buiness wants to grow and for maintaining growth there is need of investment because assets and…
Q: Evaluating Accounts Receivable Turnover for Competitors The Procter & Gamble Company and…
A: The Accounts Receivables Turonver Ratio is calculated with the help of following formula Accounts…
Q: Which statement is NOT correct? Multiple Choice O As the payout ratio goes up, the stock price also…
A: Analysis of the given options: 1. As the payout ratio goes up, the stock price also goes up…
QUESTION 18
-
Which of the following is not a correct statement?
ST US govt debt instrument is called Treasury bill.
LT US govt debt instrument includes Treasury note with maturity up to 10 years and Treasury bond with maturity up to 30 years.
ST refers to maturity up to 3 years.
LT corporate debt instrument is called corporate bond.
Bond is the term for LT debt instruments in general.
Step by step
Solved in 3 steps
- moodle1.du.edu.om suppose the government of the Sultanate of Oman is planning to issue short-term bonds on the Muscat Securities Market. You are requested to find the market value of this bond using the information below issue date: 6 June 2021. maturity date: 27 August 2021. The discount rate is 0.086. Select one: a. 1.07% b. 102.51% C. All the given choices are not correct d. 98.06% e. 99.98%True or false I. Floating/ variable rate bonds is one in which the interest payment changes with the market conditions. II. Junk or low rated bonds are rated BB or below.III. Eurobonds are bonds payable or denominated in the borrower’s currency, but sold outside the country of the borrower, usually by an international syndicate of investment bankers. IV. Treasury bonds carry the “full-faith-and-credit” backing of the government and investors consider them among the safest fixed-income investments in the world.Most corporate bonds in the U.S. have which of the following features?I. Registered formII. Bearer formIII. Quarterly coupon paymentsIV. Semiannual coupon payments Group of answer choices I and III only I and IV only II and III only II and IV only
- A graphical plot of interest rates on government debt securities (Treasury Bills) of varying maturities can have one of three shapes; increasing, decreasing, or flat. The data below show the interest rates on the government of Ghana debt securities (Treasury Bills) on two separate dates; 31st January 2019 and 4th May 2020.31 January 2019 4th May 202091 Day T’Bill 14.65% 14.12%182 Day T’Bill 15.10% 15.31%364 Day T’Bill 17.38% 16.92%Required: ii) On both dates, the yield curve appears to be upward sloping. What reasons would you assign for these upward sloping shapes of the yield curve in Ghana on these separate days? Your explanation should be practical and as detailed as possible but not exceeding 800 words.A graphical plot of interest rates on government debt securities (Treasury Bills) of varying maturities can have one ofthree shapes; increasing, decreasing, or flat. The data below show the interest rates on the government of Ghana debtsecurities (Treasury Bills) on two separate dates; 31st January 2019 and 4th May 2020. 31 January 2019 4th May 202091 Day T’Bill 14.65% 14.12%182 Day T’Bill 15.10% 15.31%364 Day T’Bill 17.38% 16.92%Required:i) Graph separate yield curves for the two dates. ii) On both dates, the yield curve appears to be upward sloping. What reasons would you assign for these upwardsloping shapes of the yield curve in Ghana on these separate days?A: B: Issuer Fee Freddie Mac; (2) Telecom, and The Underwriter B A The entity issuing the debt obligation is the borrower in the transaction. Some of the biggest issuers in the bond market are (1) which H Purchaser corporations such as the U.S. government and the government of U.K.; (2) government-related agencies, such as Fannie Mae and , such as British , such as the state of California, Sakai City, Japan; (3) such as the European Investment Bank and the World Bank. Why do entities municipal governments ebt obligations? Economies around supranational banks ering during 2012 after the 2008-2009 recession. Governments and central banks continued their efforts to facilitate economic recovery. The U.S. rederal Reserve Bank (the Fed) kept interest rates at record lows. This, along with several other reasons, found the bond markets flooded with new bond issues. The following article highlights some reasons why firms issued debt obligations to raise funds.
- You are given the following details of three default free government bonds. Assume that one can take long (buy) and short (sell) positions in these bonds. CF stands for cash flow. Bond Current price Today CF Year 1 CF Year 2 A 95.24 100 0 B 89.85 0 100 C X 70 1070 Assuming that the current market prices of Bond A and Bond B are correct, then, what should be the current theoretical (fundamental) price of Bond C, as per the no-arbitrage principle, i.e., what is the value of X? [Do not round-off any numbers. If at all you want to round-off a number, round it off at 8 decimal places.]4. We can define bond as a financial device through which a borrower (a firm or government) is obligated to pay the principal and interest on a loan at specific dates in the future. Answer questions relating to interest rates and bond prices using the following information: The price of a bond with no expiration date is $1000 and its fixed annual interest payment is $50; bond annual rate of interest is 5%. (a) If the price of this bond decreases by $250 to $750, what will its effective interest rate be for the new buyer? %, because (b) If the price of this bond increases to $1200, what will its effective interest rate be for the new buyer? (c) When bond prices go up from (a) to (b), interest rates go (up, down, nowhere). %, becauseWhich of the following are money market securities?I. Jumbo CDsII. Short-term municipal debtIII. U.S. Treasury billsIV. Commercial paper A. I and IV only B. II and III only C. I, II, and IV only D. II, III, and IV only E. I, II, III, and IV
- 20.1 Evaluate the following statements: S1 The proceeds of a bond with a face amount of P100,000,000 which sells at 102 will be P102,000,000. S2 The proceeds of a bond with a face amount of P100,000,000 which sells at 98 will be P98,000,000. S3 When bonds are issued at a discount, the bonds payable account may be credited for the proceeds from the issue. S4 When bonds are issued at a premium, amortizing the premium using the effective interest method, will increase the amortization. a. Only 1 statement is correct b. All statements are correct c. Only 2 statements are correct d. Only 3 statements are correct e. All statements are incorrect1. 2. What is meant by bond issue cost and how do we account for such bond? 3. How do we account for compound financial instruments? 4. What is the difference between convertible bonds and bonds with warrants? 5. What is the difference between the accounting for retirement of ordinary bonds and compound financial instruments?he following information is about the spot rates on Treasury securities and BBB corporate bond: Spot 1 Year Spot 2 Year Spot 3 Year Treasury 3% 4.75% 5.5% BBB Corporate Debt 7.5% 9.15% 10.5% Question: What is the implied forward rates on one-year maturity BBB corporate debt to be delivered in year 3?