User Account

All Pages

What rate of return will be realize per quarter and per year

Assignment Help Finance Basics
Reference no: EM13881874

An investor who purchased a $10,000 mortgage bond today paid only $6000 for it. The bond coupon rate is 8% per year, payable quarterly, and the maturity date is 18 years from the year of issuance. Because the bond is in default, it will pay no dividend for the next 2 years. If the bond dividend is in fact paid for the following 5 years (after the 2 years) and the investor then sells the bond for $7000, what rate of return will be realized ( a ) per quarter and ( b ) per year (nominal)?

Reference no: EM13881874

Questions Cloud

Can you offer an a priori rationale to this model : Assuming the model is acceptable, estimate the parameters of the model and their standard errors, and obtain R2 and R¯ 2 .
What semiannual rate of return did an investor make : What semiannual rate of return did an investor make who purchased a $5000 bond 4 years ago and held it until it was called 4 years later?
Why bank managers often refuse to sell securities at a loss : Explain why bank managers often refuse to sell securities at a loss relative to book value. What is the cost of continuing to hold discount instruments? What are the costs of selling securities at a gain?
Examine the environmental impact caused by the extraction : Examine the environmental impact caused by the extraction process
What rate of return will be realize per quarter and per year : If the bond dividend is in fact paid for the following 5 years (after the 2 years) and the investor then sells the bond for $7000, what rate of return will be realized ( a ) per quarter and ( b ) per year (nominal)?
Explain what factors should be used to make a decision : Suppose that the U. S. Treasury yield curve is continuously downward- sloping. To maximize interest income over the next 10 years, should a bank portfolio manager buy securities with maturities of under 1 year or securities with maturities of 10 year..
Draw a schematic diagram of the process : Draw a schematic diagram of the process and write an appropriate dynamic model for the tank level. What is the corresponding steady-state model?
Estimate the parameters of the linear model : Estimate the parameters of the linear model and interpret the results and Estimate the parameters of the log-linear model and interpret the results.
What was the semiannual interest rate when bonds were sold : Because the market interest rate increased immediately before the bonds were sold, the city received only $23.5 million from the bond sale. What was the semiannual interest rate when the bonds were sold?

Reviews

Write a Review

Finance Basics Questions & Answers

  He calculates that he can make payments of 4000 per year

matthew wants to take out a loan to buy a car. he calculates that he can make payments of 4000 per year. if he can get

  Is it efficient for financial managers to adjust business

Is it efficient for financial managers to adjust their business practices to important changes in market conditions? Explain.

  At what effective interest rate are these terms equivalent

The price of a machine is $3,500, the dealer will accept a $1,200 down payment and 24 end-of-month monthly payments of $110 each. At what effective interest rate are these terms equivalent?

  Elliott company sold one t-bill futures contract

Elliott Company sold one T-Bill futures contract when the quoted price was 93.25.  When the position was closed out, the price of the T-Bill futures contract was 94.12.

  Determine what will happend to the exchange rate

if japan has low inflation and mexico has high inflation, what will happend to the exchange rate between the Japanese Yen and Mexican Peso.

  Calculate the spot rate at t0

Assume currency R depreciated by 9% against currency S, between T0 and T1. The spot rate at T1 is: R 0.80 / S. Calculate the spot rate at T0, expressed as S / R.

  What is the net present value of this lockbox arrangement

The bank charges $0.21 a check for this service. The daily interest rate on Treasury bills is 0.02 percent. What is the net present value of this lockbox arrangement?

  Materials cost grason corporation purchases 3000 units of

materials cost. grason corporation purchases 3000 units of a raw material at a list price of 5 each. the supplier

  What are the differences between common stock and preferred

what are the differences between common stock and preferred stock? in which situations do corporations use each kind of

  How many shirts must gina sell to break even

The cost of using the equipment is $250. The materials used in one shirt cost $10, and Gina can sell these for $15 each. How many shirts must Gina sell to break even?

  Efficient market hypothesis

what implications does underpricing have on the efficient market hypothesis

  A 1 million bond issue is outstanding assume deposits earn

a 1 million bond issue is outstanding. assume deposits earn 8 percent per annum. calculate the amount to be deposited

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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