Should he discount or hold the b/a to maturity

Assignment Help Finance Basics
Reference no: EM13302595

The time from acceptance to maturity on a $1000000 bankers acceptance is 120days. the importer's bank's acceptance commission is 1.75% and the market rate for 120day B/A is 5.75%.Determine the following:

1. proceeds the exporter will receive if he holds B/A till maturity
2. acceptance commission paid by the importes bank
3. proceeds the exporter receives if he discounts the B/A
4.1 the interest rate the bank receives 4.2 the bond equivalent yield the importes bank will earn from discounting the B/A with exporter
5. if the exporter's oppurtunity cost of capital is 10%, should he discount or hold the B/A to maturity?

 

Reference no: EM13302595

Questions Cloud

Determine magnitude of velocity and acceleration of particle : The motion of a particle on the surface of a right circular cylinder is defined by the relations, R = A, theta = 2pi(t), and z=Bsin(2pi)(nt), where A is a constant. Determine the magnitudes of the velocity and acceleration of the particle at any t..
Common legal framework within our society : One of the arguments against allowing sharia courts in the United States is that we would no longer have a common legal framework within our society. Do you agree or disagree? Why?
Find the solution manual for real estate finance theory : How can I find the solution manual for real estate finance theory and practice sixth edition by claretie / sirmans.
What temperature change is required to return the specimen : The elastic modulus is 40 GPa, the yield stress is 150 MPa, the ultimate stress is 525 MPa, and the ultimate strain is 0.38 (mm/mm). Perform the following tasks for this material.  compute the tangent modulus between yield stress and ultimate stres..
Should he discount or hold the b/a to maturity : The time from acceptance to maturity on a $1000000 bankers acceptance is 120days. the importer's bank's acceptance commission is 1.75% and the market rate for 120day B/A is 5.75%.
A job description outlines the minimum qualifications : 1) A job description outlines the minimum qualifications a person must have to perform the job successfully.( )
Local police convert to community policing strategy : You have been hired as a consultant to assist a local police department convert to a Community Policing strategy. Create a plan that will guide the department through the change. Assume the Chief you are working for is new to the concept,
Which alternative is acceptable for mr. a and why : A few days ago, Mr. A has purchased a lottery. Fortunately, he has received a letter from the lottery officials that he has won that lottery. Additionally, it has been mentioned in the letter that he has to choose between one of the two given alte..
What is the magnitude of the force between the two wires : Two long, straight, parallel wires of length 3.6 m carry parallel currents of 3.2 A and 0.9 A. What is the magnitude of the force between the two wires

Reviews

Write a Review

Finance Basics Questions & Answers

  Work of acquisition is in contract management

An IT acquisition guidance document states "there is a growing realization that real work of acquisition is in contract management." At the same time, there is the decrease in success rate of IT projects

  What is the eps figure for 2008

Pizza A had earnings after taxes of $600,000 in the year 2008, and 300,000 shares outstanding. In year 2009, earnings after taxes increased to $750,000, and 25,000 new shares were issued for a total of 325,000 shares. What is the EPS figure for 20..

  What is one standard deviation

A project's coefficient of variation is 0.55. The project has a positive coefficient of correlation of 0.20. The expected value is $1,200. What is one standard deviation?

  Should morris-meyer lease or borrow and buy the equipment

Consider the $250,000 estimated salvage value. Is it appropriate to discount it at the same rate as the other cash flows? What about the other cash flows-are they all equally risky? Explain.

  What is the equipment after-tax salvage value

What is the equipment's after-tax salvage value? Round your answer to the nearest cent.

  Estimation of rate of return

Sharon Shay estimates that a college education has a $28,000 equivalent expense at graduation. She believes the benefits of her education will occur throughout 40 years of employment.

  What is the standard deviation of your portfolio

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%.

  What is the required rate of return on clover stock

Parr Paper's stock has a beta of 1.40, and its required return is 13.00%. Clover Dairy's stock has a beta of 0.80. If the risk-free rate is 4.00%, what is the required rate of return on Clover's stock? (Hint: First find the market risk premium.)

  Net present value (npv)

Elaborate on why the net present value (NPV) of a relatively long-term project is more sensitive to changes in the cost of capital than is the NPV of a short-term project. Provide two good examples of NPV that support your position.

  Project procurement management and organizational structure

The structure of an organization can affect the entire success of the project from initiation to closure. Identify if your organization is centralized or decentralized and evaluate benefits and weaknesses of structure.

  Calculation of loan payments

Chrysler is providing a choice of either 48 month 2.0% APR financing, OR $2000 cash back if you pay "cash" on a car buy. The stated price is $25,000.

  Calculate the total return

Calculate the total return for each year and Indicate the level of return you would expect in 2013.

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