What is the return on your investment in the bond

Assignment Help Financial Management
Reference no: EM13722777

You purchase a 7 percent $1,000 bond with a term of ten years and reinvest all interest payments. If interest rates rise to 10 percent after you purchase the bond what is the return on your investment in the bond?

Reference no: EM13722777

Questions Cloud

What is the principal balance on the loan after six months : Assume the following information for a car note: Original loan amount = $23,500 Annual interest rate = 7.25% Term of loan = 24 months. What is the principal balance on the loan after six months?
Interest or discount rate with interest compounded annually : What is the present value of $7,800 received 13 years from now using a 16% interest or discount rate, with interest compounded annually?
What is the equivalent ticket sales : 28 years ago, ET: The Extra-Terrestrial generated $435,110,554 in ticket sales. What is the equivalent ticket sales figure in today's dollars (assume a 3% inflation factor compounded annually).
Currently the average tuition of a state college : College tuition has been rising at a rate of 7% per year. Currently the average tuition of a state college is $10,600 per year. Andrea's son Trevor will begin college in 9 years. Andrea's portfolio is making 2% annually. How much does Andrea need to ..
What is the return on your investment in the bond : You purchase a 7 percent $1,000 bond with a term of ten years and reinvest all interest payments. If interest rates rise to 10 percent after you purchase the bond what is the return on your investment in the bond?
Tax bracket invests in the preferred stock : A corporation in a 34% tax bracket invests in the preferred stock of another company and earns a 6% pre-tax rate of return. An individual investor in a 15% tax bracket invests in the same preferred stock and earns the same pre-tax return. The after t..
Pension plan is obligated to make disbursements : A pension plan is obligated to make disbursements of $1.7 million, $2.7 million, and $1.7 million at the end of each of the next three years, respectively. The annual interest rate is 8%. If the plan wants to fully fund and immunize its position, how..
What is the duration if the yield to maturity : Find the duration of a 6% coupon bond making annual coupon payments if it has three years until maturity and a yield to maturity of 6.2%. What is the duration if the yield to maturity is 10.2%?
Construct a price-weighted index : You construct a price-weighted index of 78 stocks. At the beginning of the day the index is 9,364.36. During the day, 77 stock prices remain the same, and one stock price increases $4.30. At the end of the day, your index value is 9,417.95. What is t..

Reviews

Write a Review

Financial Management Questions & Answers

  Briefly describe bankruptcy law

Briefly describe bankruptcy law. If a firm were to default on its bonds, would the company be liquidated immediately? Would the bondholders be assured of receiving all of their promised payments?

  Market value of equity equals gross proceeds from offering

Red Shoe Co. has concluded that additional equity financing will be needed to expand operations and that the needed funds will be best obtained through a rights offering. It has correctly determined that as a result of the rights offering, the share ..

  Conduct a swot analysis identifying leverages and problems

What is the central problem based on the students review and SWOT analysis of this organization - analysis of strengths and weaknesses

  Who will have social security benefits

Compare the tools as to how they would apply for a couple in their mid-50s who are classified as middle-income earners, with no dependents (two adult children), who will have Social Security benefits, and who will have retirement plan income from ..

  Starbucks expansion is well documented in this case

Starbucks expansion is well documented in this case. Early in 2008 (and well before the widespread economic downturn) Starbucks began closing hundreds of stores across the U.S. Explain why you think this happened. Did Starbucks do anything “wrong” to..

  What should your bond sell for in the secondary market

You are holding a bond with an annual coupon rate of 3.5% that matures in 11 years. Bonds recently issued of similar risk have a coupon rate of 4%. What should your bond sell for in the secondary market?

  Computing tax liabilityhardwaresoftware setup required

computing tax liabilityhardwaresoftware setup required financial calculatorproblem description jonathan a single male

  Should the new lathe be purchased

The firm estimates the revenues and expenses for the new and the old lathes to be as shown in the following table. The firm is subject to a 40% tax rate. Should the new lathe be purchased?

  Memorandumtonbspnbspnbspnbspnbspnbsp nbspnbsp management

memorandumtonbspnbspnbspnbspnbspnbsp nbspnbsp management analystfromnbspnbsp nbspnbsp beverly bunchbb budget

  Prepare the consolidated financial statements

Prepare all consolidation adjustment entries required to prepare the consolidated financial statements as at 30 June 2011.  Provide a brief heading for each adjustment that you prepare.

  What is your dollar profit if platinum sells

The contract size for platinum futures is 50 troy ounces. Suppose you need 500 troy ounces of platinum and the current futures price is $1,265 per ounce. How many contracts do you need to purchase? How much will you pay for your platinum? What is you..

  How the choice of depreciation method affects

Provide recommendations and justifications of which depreciation method(s) are appropriate in this case. Explain how the choice of depreciation method affects reported profits.

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