What is the loss or gain to investor

Assignment Help Financial Management
Reference no: EM131333654

Suppose you purchase a 9-year AAA-rated Swiss bond for par that is paying an annual coupon of 5 percent and has a face value of 2,600 Swiss francs (SF). The spot rate is U.S. $0.66667 for SF1. At the end of the year, the bond is downgraded to AA and the yield increases to 7 percent. In addition, the SF depreciates to U.S. $0.74074 for SF1.SHOW WORK PLEASE:)

a. What is the loss or gain to a Swiss investor who holds this bond for a year? (Input the amount as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

 LossGain to Swiss investor %  

b. What is the loss or gain to a U.S. investor who holds this bond for a year? (Input the amount as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

 LossGain to U.S. investor %

Reference no: EM131333654

Questions Cloud

What approach to ethical decision making does jeremy use : Jeremy's ethical decision making is guided primarily by his belief that his self-interests should be promoted as long as he doesn't harm others. What approach to ethical decision making does Jeremy use
Analyze conceptual framework with reference to annual report : Analyze the conceptual framework with reference to the annual reports of your chosen companies in light of the reporting requirements imposed on accountants and those charged with governance of corporations.
Describe the two primary components of a cpu architecture : Describe the two primary components of a CPU architecture.Describe the purpose of the Instruction Register.Describe the roles of the data and address registers in a CPU architecture.Describe the purpose of the Flag register.
Search the list to perform the insertion : Design and implement an algorithm that inserts items on the end of a list. Your algorithm should not have to search the list to perform the insertion.
What is the loss or gain to investor : Suppose you purchase a 9-year AAA-rated Swiss bond for par that is paying an annual coupon of 5 percent and has a face value of 2,600 Swiss francs (SF). The spot rate is U.S. $0.66667 for SF1. At the end of the year, the bond is downgraded to AA and ..
Develop a variance analysis including a budget variance : ACC 202- Complete A. Develop a variance analysis including a Budget Variance performance report and appropriate variances for materials, labor, and overhead.
What is the explanation of ratio : If the purple-flowered plant is heterozygous for both traits, the expected ratio in the offspring is 1 purple-serrated: 1 purple-smooth:1 white-serrated:1 white-smooth. Instead, you see 4 purple-serrated:1 purple-smooth:1 white-serrated:4 white-sm..
Algorithm that will convert a general multiway tree : Design and implement an algorithm that will convert a general multiway tree (each node may have more than two successors) to the corresponding ordered binary tree.
Why is this clause important to practice of business in usa : Why is this clause important to the practice of business in the USA? Give examples and be specific. Since this course is about Law, Business, and Society, please explain who wins - and who loses - when the "limited Times" referred to above are ext..

Reviews

Write a Review

Financial Management Questions & Answers

  Financial reporting environment for the quarter

Prepare a 2 page newsletter that identifies and summarises developments and changes in the financial reporting environment for the quarter from January to March 2013.

  Establish scholarship fund

Rory McIlroy, professional golfer from Northern Ireland, just won the 2016 FedEx Cup which paid him $10 million. Suppose Rory wanted to establish a scholarship fund 10 years from now, which would pay annual scholarships totalling $1,000,000 per year ..

  What will be the value of the investment in two years

Your brother has asked you to help him with choosing an investment. He has $7,400 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 0.0500 annually with the interest being paid quarterly. What will be the..

  Accept projects based upon fluctuations in cost of capital

What qualitative considerations are important for a company seeking to raise capital? Answer this by considering the effect of leverage in your response. Specifically, what expected effects will additional leverage have on a company’s decision to acc..

  Foundation principle of the employment relationship

The class began with a discussion of at-will employment being the foundation principle of the employment relationship. The rest of the course complicated this principle by providing numerous exceptions. Based on your reading throughout the course, pr..

  Cost of goods sold-administrative and selling expenses

During the year, Belyk Paving Co. had sales of $2,392,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,433,000, $435,800, and $490,800, respectively. In addition, the company had an interest expense of $2..

  What is the stock expected price five years from today

A stock is expected to pay a dividend of $0.30 at the end of the year (i.e., D1 = $0.30), and it should continue to grow at a constant rate of 7% a year. If its required return is 12%, what is the stock's expected price 5 years from today?

  What is a fixed budget

What is a fixed budget? When is it an appropriate means of evaluating a manager’s performance and why?

  What is the required rate of return on stock

ABC Company's last dividend was $0.8. The dividend growth rate is expected to be constant at 8% for 3 years, after which dividends are expected to grow at a rate of 4% forever. The firm's required return (rs) is 12%. What is its current stock price (..

  Should the company lease the equipments

A company is considering to lease an equipment which has purchasing price of 15,00,000.- Should the company lease the equipments.

  What is the maximum initial cost the company

Och, Inc., is considering a project that will result in initial aftertax cash savings of $1.83 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. What is the maximum initial cost the compan..

  Student loan debt-annual rate of return

Are are currently 25 and would like to retire at age 65 with $1.5 million dollars. You currently owe $20,000 in student loan debt. If you assume the stock market will give you a 8% annual rate of return, how much would you need to save every month if..

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