Effective annual return

Assignment Help Finance Basics
Reference no: EM13322427

Five years ago you purchased a bond with a $1000 face value. It had a 20 year remaining maturity, a 4% coupon rate (paid semi-annually), and the yield to maturity was 3%. Since then,  inflation has driven interest rates up by 2%. If you sold your bond today, what would be your  effective annual return?

Reference no: EM13322427

Questions Cloud

Differences between integrative and distributive negotiation : Describe the differences between integrative and distributive negotiations and cite a situation in which distributive negotiation is more appropriate than integrative negotiation.
Create a class named order that performs order processing : Create a class named Order that performs order processing of a single item that sells for $19.99 each. o Create 4 Order class fields: order number, customer name, quantity ordered, and total price.
State a balance equation for the formation of c4h10o : write a balance equation for the formation of C4H10O(i) from its elements (c) By using the information in this problem and data in Table 5.3, calculate ?H°f for diethyl ether
What is the longest focal length lens : A camera with interchangeable lenses is used to photograph a distant object. The angular size of the object is 19 degrees. What is the longest focal length lens
Effective annual return : Effective annual return
What are the limiting factors for grown mesh networks : Given a computer with a disk capacity of 16 GB and a word size of 32 bits, how many wordssize of 32 bits, how many words can be stored on the disk? Show your calculations.
What should the radius of curvature be for the mirror : A spherical mirror is to be used to form, on a screen located 5.0 m from the object, What should the radius of curvature be for the mirror
Determine the cartesian equation of the plane : Determine the Cartesian equation of the plane that has x-, y-, and z-intercepts at 2, -4, and 3 respectively and determine the Cartesian equation of the plane that passes through the origin and is parallel to the plane in part a.
Find the magnification and the height of the image on film : A person 1.7 m tall is standing 2.50m in front of a camera. Find the magnification and the height of the image on the film

Reviews

Write a Review

Finance Basics Questions & Answers

  External financing required for finance sales increase

Rodeo Supply Corporation is considering to increase its sales by 20% next year. The sales increase will need a total additional investment in receivables, inventory, and fixed assets of $750,000.

  Computation of equivalent full units

If 8000 units were in starting inventory, 24,000 units per started and 6,000 units were in the ending inventory how many units were finished and transferred out ?

  What is the yield on an 8-year treasury bond

The maturity risk premium isequal to 0.1 (t-1)%, where t=the bond's maturity. The default risk premium for a BBB-rated bond is 1.3%.

  Your success in financial management

After graduating from graduate school you create it big-all because of your success in financial management.

  Calculate the holding period return

Based on the following information calculate the holding period return.

  Determine the five-year equivalant annual annuity

Determine the five-year equivalant annual annuity of the following poject if the appropriate discount rate is 16%.

  What are firm income tax liability and its after-tax income

The Talley Corporation had a taxable income of $485,000 from operations after all operating costs but before (1) interest charges of $97,000, (2) dividends received of $29,100.

  Explain how the degree of operating and financial leverage

Explain how the degree of operating and financial leverage can change the profitability of the firm when sales levels change significantly. Use examples and explain your answers.

  At what price would the bonds sell

Six years after the bonds were issued, the market rate of interest on bonds such as those rose to 14%. At what price would the bonds sell (assume it is six years after issue)?

  What was its charge for depreciation and amortization

Income Statement: Pearson Brothers recently reported an EBITDA of $7.5 million and net income of $1.8 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization?

  Horizontal-vertical and conglomerate mergers

What are the differences among horizontal, vertical, and conglomerate mergers? What does the U.S. government hope to achieve through the use of its antitrust policy?

  Creating income statement and calculate cash flow

Payne Urology, a non profit business, had revenues in 2012 of 96,000 dollar. Expenses other than depreciation were 75 percent of revenues and Depreciation was $10,000.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd