What was your return on the bond

Assignment Help Financial Management
Reference no: EM131820533

1. A fixed payment loan with annual payments of $1,000 for the next 10 years. The interest rate is 2%.

(Show your work: PV for each payment, and also show the overall PV.)

2. A lottery offers a grand prize of $1 million, payable over 10 years at $100,000 per year, starting immediately. What is this grand prize really worth? Use an interest rate of 3%.

(Show your work: PV for each payment, as well as the total.)

3. Consider a bond with a 2% annual coupon and a face value of $1,000.

Find the current price for each of the following combinations

      a. 2 years to maturity, 1% yield to maturity

      b. 2 years to maturity, 2% yield to maturity

      c. 2 years to maturity, 3% yield to maturity

      d. 4 years to maturity, 2% yield to maturity

      (Again, show your work! — PV for each cash flow, as well as the total.)

4. You bought a 3% coupon bond with a face value of $1,000 one year ago for $1,200, and you just sold it for $1,260. What was your return (or rate of return) on the bond?

Reference no: EM131820533

Questions Cloud

Calculating credit card interest : Ryan Gray, a student at State College, has a balance of $380 on his retail charge card; Assume that balance is computed by the average daily balance method.
Compare the principles with the motivational techniques : compare the principles with the motivational techniques from the text. chapter link below.
Types of benchmarks in financial statement analysis : What is benchmarking, and what are the two main types of benchmarks in financial statement analysis?
What is the mean of the sampling distribution : a. What is the mean of the sampling distribution? b. What is the standard deviation of the sampling distribution?
What was your return on the bond : You bought a 3% coupon bond with a face value of $1,000 one year ago for $1,200, and you just sold it for $1,260. What was your return on the bond?
Discuss the history nature of clinical psychology : Discuss the differences between clinical psychology and other mental health professions, including social work, psychiatry, and school psychology.
What is the probability that the manufacturing line : The standard deviation for diameter is 0.02 inches. What is the probability that the manufacturing line will be shut down unnecessarily?
Evaluate a company ability to pay long-term debt : Briefly describe the ratios that can be used to evaluate a company's ability to pay long-term debt.
What are common red flags in financial statement analysis : What are some common red flags in financial statement analysis? What is reported in the discontinued operations section of the income statement?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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