Answer:
Price of bond = $916.26
Explanation:
<em>The amount to be paid for the bond would be equal to the Present value (PV) of the redemption Value (RV) plus the present value of the interest payments discounted at the yield rate.</em>
Let us assume that the face value of the bond is 1000 and it is redeemable at par
Interest payment = 6.375%× 1000 = 63.75
PV of interest payment = A× (1- (1+r)^(-n))/r
A- 63.75, r-8.5%, n-5
PV = 63.75 ×(1- (1.085)^(-5))/0.085)
PV = 251.215
PV of RV
PV = RV × (1+r)^(-5)
= 1,000 × (1.085)^(-5)
= 665.045
Price of bond = $916.26
I hate pizza. it’s grosssdd
Answer:
33.33%
Explanation:
Unemployment rate is the proportion of the labour force without a job
Unemployment rate = (number of unemployed workers / total labour force ) x 100
25 /75 x 100 = 33.33%
Question: Name at least two risk banks face?
Answer: <u>There are many types of risks that banks face. Two of out of these eight risks, credit risk and market risk</u>
<em>Hope this helps!.</em>
<em>~~~~~~~~~~~~~~~~~</em>
<em>~A.W~ZoomZoom44</em>
Answer:
Bank X will received: $13,554.73.
Explanation:
* Calculation of Betty equal monthly repayment by using present value formula for annuity: 19,800 = PMT/1% x ( 1 - 1.01^-36) <=> PMT = $657.643
* The effective annual rate at the time of loan selling is calculated as: (1+14%/2)^2 - 1 = 14.49% => The monthly discount rate is 1.1449 ^(1/12) -1 = 1.134%
After the 16th payment is made, there is another 20 equal repayments, made at the end of each months; so we have 20 discounting periods, PNT = 657.643; discounting rate = 1.134%
=> Price Bank X receives = Present value of the repayment stream = 657.643/0.0134 x [1 - 1.0134^(-20)] = $13,554.73.