Which is a better investment 3% per year compounded monthly or 3.2% per year simple interest?
Given that (1+0.0025)12 =1.0304.
In: Math
A bank invested $50 million in a one-year asset paying 10 percent interest per year and simultaneously issued a $50 million, two-year liability paying 8 percent interest per year to pay for it. • Is the bank short funded or long funded? • What is the bank’s net interest income in year one • What will be the bank’s net interest income in year two if at the end of the first year all interest rates have decreased by 1.5 percent (150 basis points)?
In: Finance
A 3-year $100 par value bond pays 9% annual coupons. The spot
rate of year 1 is 6%, the 2- year spot rate is 12%, and the 3-year
spot rate is 13%.
a) Determine the price of the bond
b) Determine the yield to maturity of the bond
A 2-year $100 par value bond pays 5% semi-annual coupons. The
6-month spot rate is 2%, the 1-year spot rate is 2.5%, the 18-month
spot rate is 3% and the 2-year spot rate is 4%.
c) Determine the price of the bond
d) Determine the yield to maturity of the bond
In: Finance
Dufner Co. Issued 15-year bonds one year ago at a coupon rate of 4.8 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.3 percent, what is the current dollar price assuming a $1,000 par value? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Current bond price = _______
In: Finance
How will inflation and rising interest rates over the next year affect those invested in 10-year U.S. Treasuries versus those invested in 30-year U.S. Treasuries, which investors would suffer larger losses,explain?
In: Finance
John, 38, makes $125,000 per year. He has a 35 year old wife, Nancy, and a daughter who just turned 7. John’s share of the family’s consumption is 21%, and he pays an average tax rate of 28%. He plans to work another 30 years and expects salary increases equal to inflation, which he expects to be 3% annually. He expects to earn an 8% nominal rate of return on his investments.
1. Use the Human Life Value (HLV) method to calculate John’s appropriate amount of life insurance coverage.
Please show up calculate in Excel, Thank you!
In: Finance
McKay Company sells merchandise with a one-year warranty. In Year 1, sales consisted of 1,200 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in Year 1 and 70% in Year 2. In the Year 1 income statement, McKay should show warranty expense of
In: Accounting
A one-year T-bond rate is currently 3% and the one-year rate in 12 months is expected to be 2.5% in addition to a liquidity premium of 0.25%. Based on this information, what do expect the two-year T-bond rate to currently be?
In: Finance
In: Finance
|
Year |
Net Cash Flow |
|
1 |
$20,000 |
|
2 |
25,000 |
|
3 |
30,000 |
|
4 |
35,000 |
It will cost $65,000 to implement the project, all of which must be invested at the beginning of the project. After the fourth year, the project will have no residual value.
Using the most likely estimates of cash flows, conduct a discounted cash flow calculation assuming a 20 percent hurdle rate with no inflation.
What is the discounted profitability index of the project?
In: Finance