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In a recent trading session, the benchmark 30-year Treasury bond’s market price went up 13.8 dollars per $1000 face value to 1027.2 dollars, while its yield fell from .07 to .068. The bond’s market price then went up another 12.8 dollars per $1000 face value as the yield fell further to .0665 from .068. Report answers for the following (using average of latest two bond prices for duration and average of latest three bond prices for convexity):
1. Convexity, using the average of all three market prices of the bond in the denominator of the formula.
2. First modified duration, using average of first two market prices of the bond in the denominator of the formula.
3. Second modified duration, using average of second and third prices of the bond.
4. The expected rise in bond price if the interest rate were to fall another 20 basis points (.002) from .0665, using the average of two modified durations and convexity.
Calculate, interpret, and compare the following financial ratios for Tesla and General Motors, based on end of fiscal year 2015 data:
How can a dollar-based investor make money?
Your firm has taken out a $536,000 loan with 8.2% APR (compounded monthly) for some commercial property. As is common in commercial real estate, the loan is a 5-year loan based on a 15-year amortization. To do this, you will make 59 equal payments ba..
Abe is thinking of buying a piece of commercial property as an investment. Abe be indifferent between buying the property and not buying the property?
Frifeldt Farm just paid a dividend of $1,026, has a total equity of $21,650, total assets of $31,450, and a net income of $3,420. What is the sustainable growth rate?
In order to expect that it will fund her retirement, Glenda needs her portfolio to have an expected return of 13.5 percent per year over the next 30 years. then what is the minimum expected annual return for Stock 3 that is likely to enable Glenda to..
Sow Tire, Inc., has sales of $1,442,000 and cost of goods sold of $1,242,000. The firm had a beginning inventory of $96,200 and an ending inventory of $78,000. What is the length of the days’ sales in inventory?
A bank will return $4500 on a 10-year certificate of deposit that originally cost $125. What interest rate, compounded annually, is the bank paying? Determine the effective interest rate corresponding to 4.75% per year, compounded continuously.
Hook Industries capital structure consists solely of deb and common equity. It can issue debt at rd = 11% and its common stock currently pays a $2.00 dividend per share. The stock's price is currently $24.75, its dividend is expected to grow at a con..
Based on the corporate valuation model, Hunsader’s value of operations is $300 million. The balance sheet shows $20 million of short-term investments that are unrelated to operations, $50 million of accounts payable, $90 million of notes payable, $30..
Explain foreign exchange market. Write about all the types of foreign exchange Markets. Explain the participants in foreign exchange markets.
If rawlings wants to issue a zero-coupon bond, how many bonds will it need to sell to raise the $38,800,000?
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