Reference no: EM132825432
Question -
Q1. Given two zero-coupon bonds with the same face value, one with a time remaining to maturity of 25 years, and the other maturing in 10 years, which one will have a lower market price?
Q2. Suppose Gomas Enterprises has issued a bond that pays 11% interest ($55 semi-annual coupons), and the current market yield is 9%.
(a) If the bond matures in 20 years, compute its current price.
(b) What if the bond matures in 1 year?
(c) What do you notice when comparing the 2 prices and their components?
Q3. Explain what types of individual investor would be interested in bonds, as opposed to putting their money into stocks or savings accounts.
Q4. Obviously, an investment that requires a $10,000 initial payout and pays back $5,000 per year for 2 years is not a good investment. What would its NPV curve look like? What is its IRR?
Q5. Suppose you have an investment opportunity that requires a $40,000 initial investment, but will repay you $20,000 at the end of each of the next three years (first payment in one year).
(a) Calculate the payback period
(b) Calculate the IRR
(c) Assuming an interest rate of 6%, calculate the NPV
Q6. Suppose you are given a different investment opportunity, one that requires the same initial investment of $40,000, but is estimated to pay out $10,000 the first year and $26,000 in each of the following two years. Compare this investment to the investment in Part 1. Which is more attractive? If it depends on interest rates, explain how.
|
Probability distribution and relation to risk
: Define the following terms, using graphs or equations to illustrate your answers where feasible.
|
|
Explain about the recording of the stock dividend
: Explain about the recording of the stock dividend? The Mulieri Company was authorized to issue 100,000 shares of common stock
|
|
The topic of color can be minefield
: Kirk (2016) states that the topic of color can be a minefield. The judgment involved with selecting the right amount of color for a particular application
|
|
Is self-compassion the new-improved self-esteem
: In recent years, some researchers have proposed that narcissism levels are on the rise as evidenced by an increased sense of entitlement and unrealistic expecta
|
|
Explain what types of individual investor would interested
: Explain what types of individual investor would be interested in bonds, as opposed to putting their money into stocks or savings accounts
|
|
How much is lease-related liability to be shown as current
: On December 31, 2018, How much is the lease-related liability to be shown as current in the statement of financial position on December 31, 2018?
|
|
Describe brothers steps for forensic analysis
: In the United States, a number of law enforcement agencies, including the Secret Service, the Federal Bureau of Investigation (FBI), and the Department.
|
|
Mechanistic-organic and organizational behavior
: Pick one of the following terms for your research: centralization, contingency, decentralization, efficiency, mechanistic, organic, organizational behavior,
|
|
Determining scores for applicants responses
: Describe how you might go about determining scores for applicants' responses to: a. interview questions, b. letters of recommendation, and c
|