User Account

All Pages

Calculate the flat price of the bond

Assignment Help Accounting Basics
Reference no: EM133063649

Question 1 - The following data relate to a corporate bond which pays coupons semi-annually: Settlement date 01 March 2020 Maturity date 31 December 2040 Coupon rate 12% Yield to maturity 10% Face value $1,000 Percentage of face value paid back to the investor on maturity 100% Using the above data, calculate i. The flat price of the bond ii. Accrued interest iii. Invoice price of the bond Note: Show the assumptions, if any, you made in your calculations.

Question 2 - A company must make a payment of $18,983 in 11 years. The market interest rate is 6%. The company's portfolio manager wishes to fund the obligation using four-year zero-coupon bonds and perpetuities paying annual coupons. How can the manager immunize the obligation? Suppose that three years have passed, and the interest rate remains at 6%. Is the position still fully funded? Is it still immunized? If not, what actions are required?

Reference no: EM133063649

Questions Cloud

Reduce the impact of a recession : How is the Canadian government currently using fiscal and monetary policy to reduce the impact of a recession?
What is your AMT : In a year where the AMT (alternative minimum tax) exemption is $115,000, Assuming a regular taxable income of $500,000, what is your AMT
Explain the public health measure : Scotland has introduced price floors on alcohol as a public health measure. Higher price levels will lower sales, which would seem to hurt producers.
Explain hypothetical business example : Describe an actual (from your own work experience or from research) or hypothetical business example of one of the following:
Calculate the flat price of the bond : Using the above data, calculate i. The flat price of the bond ii. Accrued interest iii. Invoice price of the bond Note: Show the assumptions, if any
Katrina troubled waters-the rescue worker : Case study: "Katrina's Troubled Waters: The Rescue Worker's Dilemma" NATIONAL CENTER FOR CASE STUDY TEACHING IN SCIENCE
Compute druig and makkari federal income tax payable : Sale of 1244 stock resulting in a loss of $105,000. The stock was acquired eight months ago. Compute Druig and Makkari Federal income tax payable
Explain the present industrial revolution : Question: How are labor markets, international competitiveness, and production in the Unites States affected by the present industrial revolution.
Essential elements of enforceable contract : Define the five essential elements of an enforceable contract, and demonstrate how each element relates to your example.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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