What is implicit interest in dollars for first year of bond

Assignment Help Financial Management

Reference no: EM131320496

1. The nominal rate of return on the bonds of Stu's Boats is 10.25 percent. The real rate of return is 3.0 percent. What is the rate of inflation?

5.13 percent

3.42 percent

7.04 percent

7.25 percent

6.63 percent

2. A zero coupon bond with a face value of $1,000 is issued with an initial price of $455.50. The bond matures in 18 years. What is the implicit interest, in dollars, for the first year of the bond's life? Use semiannual compounding.

$11.06

$10.17

$20.34

$12.19

$6.09

Reference no: EM131320496

Questions Cloud

What is the current bond price : Aloha Inc. has 4.5 percent coupon bonds on the market that have 6 years left to maturity. If the YTM on these bonds is 8.2 percent, what is the current bond price?

Which bond would you generally expect to have highest yield : Which bond would you generally expect to have the highest yield?

Discretion is referred to as being which type of bond : A bond that can be paid off early at the issuer's discretion is referred to as being which type of bond? Par value. Callable. Senior. Subordinated. Unsecured.

Business math handbook that accompanies the course textbook : Assuming that you have the business math handbook that accompanies the course? (sorry I have never done this before so I am not sure what you have?)The book is Practical Business Math Procedures Ron Swift earned $1500 last week. Using the tables in t..

What is implicit interest in dollars for first year of bond : The nominal rate of return on the bonds of Stu's Boats is 10.25 percent. The real rate of return is 3.0 percent. What is the rate of inflation? A zero coupon bond with a face value of $1,000 is issued with an initial price of $455.50. The bond mature..

What was wallace total long-term debt and total liabilities : At year-end 2015, Wallace Landscaping’s total assets were $1.2 million and its accounts payable were $325,000. Sales, which in 2015 were $2.5 million, are expected to increase by 15% in 2016. Total assets and accounts payable are proportional to sale..

Operating exposure can be defined : Operating exposure can be defined as: the future home currency values of the firm's assets and liabilities the extent to which the firm's operating cash flows would be affected by random changes in exchange rates the sensitivity of realized domestic ..

Additional funds needed for the coming year : Broussard Skateboard's sales are expected to increase by 15% from $7.8 million in 2015 to $8.97 million in 2016. Its assets totaled $3 million at the end of 2015. Broussard is already at full capacity, so its assets must grow at the same rate as proj..

How much does a share of preferred stock cost : E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $26 in perpetuity, beginning 15 years from now. If the market requires a return of 4 percent on this investment, how much does a share of preferred stock cost t..

User Account

All Pages