User Account

All Pages

Bond yield to bond coupon maturity rating maturity

Assignment Help Financial Management
Reference no: EM131011091

A $1,000 par corporate bond with a coupon of 5% that pays interest semiannually is currently selling for $1,040. The current rate of return or current yield on this bond is

A: 2.4% B: 2.5% C: 4.0% D: 4.8% E: 5.0%

Each of the following four corporate bonds is currently selling at a discount:

Bond Yield to Bond Coupon Maturity Rating Maturity A 5.2% 5 years AA 6.0% B 5.2% 10 years B 7.0% C 5.0% 15 years AA 6.0% D 4.8% 5 years AAA 5.8%

Jill is considering investing in corporate bonds, but she is concerned about maintaining her principal over her 5-year time horizon. She anticipates market interest rates to increase over the next several years. The best choice for Jill is to invest in

A: Bond A B: Bond B C: Bond C D: Bond D E: Either Bond A or Bond

Linda lives in New York City and pays 8% in local and state taxes and 30% in Federal income taxes. Her time horizon is about four years, and Linda is concerned with maximizing her return. Linda is considering the following bond investments that each have similar ratings and commissions:

Bond Type     Yield A NY State    5.3% B Virginia State Bond   5.6% C Corporate Bond   8.2%

Based on the above information, Linda’s best choice is

A: Bond A B: Bond B C: Bond C D: Either Bond A or Bond B since they are both municipals E: Linda’s time horizon is too long to be investing in bonds

Reference no: EM131011091

Questions Cloud

About the operating cycle : Aviva Technology’s operating cycle is 93 days. Its inventory was $121,240 at the end of last year, and the company had a $1.0 million cost of goods sold. How long does it take Aviva to collect its receivables on average? (Round intermediate calculati..
Description of the theories including the key components : Provide the following information based on the theories: A description of the theories including the key components and Describe at least one therapeutic technique that can be used with a child or adolescent using the the two theories
Budget actual current monthly salary before tax : Budget profile for a medical Resident monthly Budget Actual Current Monthly salary before tax $5,000 Retirement deduction before taxes $350 pretax contribution $300 Housing $900 utilities $70 $65 Food $700 $500 Gas $125 $100 Car payment $400 cell pho..
Verbal and performance measures in intelligence testing : What are the differences between verbal and performance measures in intelligence testing? Compare and contrast using examples. What are the influences of language, culture, and education on popular measures of intelligence
Bond yield to bond coupon maturity rating maturity : A $1,000 par corporate bond with a coupon of 5% that pays interest semiannually is currently selling for $1,040. The current rate of return or current yield on this bond is. Bond Yield to Bond Coupon Maturity Rating Maturity A 5.2% 5 years AA 6.0% B ..
Deposited in a savings account : You deposited $11175 in a savings account that pays 9.24 percent interest, compounded quarterly, planning to use it to finish your last year in college. Eighteen months later, you decide to go to the Rocky Mountains to become a ski instructor rather ..
The osi model is a reference model : Data Link layer: Provides an interface with the network adapter; maintains logical links for the subnet
Identify the federal guidelines-statutory : Identify the federal guidelines-statutory, case law, and American Psycological Association (APA)-for psychological tests. Describe some of the cases influential in bringing about the federal government's involvement in the use of tests in the forens..
Write a c program that outputs a table of values of t : Write a C program that outputs a table of values of t and l!C , The user enters the range of time desired in seconds and the incre­ ment in fractions of a second, the source current Us) in amperes, the resistance (R) in ohms, the initial voltage ..

Reviews

Write a Review

Financial Management Questions & Answers

  Credit default swap is essentially

An option strategy in which you hold a long position in both a put and a call option with the same strike price is called. A credit default swap is essentially a

  What stock would you recommend to the client

As a financial advisor, you are assigned a new client who is considering investing in one of two stocks, A or B. The table below shows information about the performance of stocks A and B last year. Based on these factors, what stock would you recomme..

  What is the component cost of debt

Several years ago the Jakob Company sold a $1,000 par value, non callable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semi annually. The bond currently sells for $925, and the company’s tax rate is 40%. What is the c..

  To hedge long position in put option you need

To hedge a long position in a put option you need to:

  What is opportunity cost associated with using capacity

You are considering adding a new software title to those published by your highly successful software company. If you add the new product, it will use capacity on your disk duplicating machines that you had planned on using for your flagship product,..

  Project is expected to create operating cash flows

A project is expected to create operating cash flows of $33,000 a year for three years. The initial cost of the fixed assets is $68,000. These assets will be worthless at the end of the project. An additional $4,500 of net working capital will be req..

  Explain what kinds of real estate investment vehicles exist

Despite the crash of 2008 and 2009, real estate remains a solid investment over time. Why might this be the case? What is it about real estate that makes it a good investment? What kinds of real estate investment vehicles exist

  Calculate the firms net income

Garden Pro Corporation has sales of 4,279,540; income tax of $509,967; the selling, general, and admin expenses of $284,673; depreciation of $340,470; cost of goods sold of $,619,760; and interest expense of $180,429. Calculate the firm’s net income.

  Calculate the expected return on the portfolio

Your portfolio is diversified. It has an expected return of 11% and a beta of 1.10. You want to add 200 shares of Tundra Corporation at $40 a share to your portfolio. Tundra has an expected return of 13.0% and a beta of 1.50. The total value of the i..

  Expected return-standard deviation of return on portfolio

Stock A’s expected return and standard deviation are E[rA] = 8% and ?A= 15%, while stock B’s expected return and standard deviation are E[rB] = 12% and ?B= 21%. a. Determine the expected return and standard deviation of the return on a portfolio with..

  Difference in present value between using a discount rate

You are going to receive $205,000 in 50 years. What is the difference in present value between using a discount rate of 14 percent versus 9 percent? Use Appendix B as an approximate answer, but calculate your final answer using the formula and financ..

  Prepare depreciation schedule using sum-of-the-year method

The price of a laser printer purchased by Paul's Printers and Office Supplies was $713. It cost $27 for delivery. The salvage value at the end of a 5-year life is $65. Prepare a depreciation schedule using the sum-of-the-year's method, and then enter..

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