QUESTION 14 Kem Corporation's 5-year bonds yield 6.60% and 5-year T-bonds yield 3.40%. The real risk-free...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
QUESTION 14 Kem Corporation's 5-year bonds yield 6.60% and 5-year T-bonds yield 3.40%. The real risk-free rate is r-2.5%, the default risk premium for Kern's bonds is DRP-1.90% versus zero for T-bonds, the liquidity premium on Kern's bonds is LP 1.3%, and the maturity risk premium for all bonds is found with the formula MRP-(t-1) 0.1%, where t number of years to maturity. What is the inflation premium (IP) on all 5-year bonds? O a 0.38% Ob.0.54% 0.0.0.50% O d. 0.51% (= 0,48 % QUESTION 15 Moerdyk Corporation's boods have a 15-year maturity, a 7.25% semianmaal coupon, and a par value of $1,000. The going interest rate (rd) is 5.30%, based on semiannual compounding. What is the bond's price? &$1,200.05 Ob$1,500.06 Oc$1,224.05 Od $948.04 = $1,164,05 Click Save and Submit QUESTION 9 You just inherited some money, and a broker offers to sell you an annuity that pays $36,800 at the end of each year for 20 years. You could earn 4% on your money in other investments with equal risk. What is the most you should pay for the annuity? Oa. $544,957.21 Ob. $536,582.60 O $580,054.02 Ⓒd. $500,124.01 Oe. $555,425.46 QUESTION 10 What's the rate of return you would earn if you paid $52,000 for a perpetuity that pays $2355 per year? O.3.42% b.4.53% e-7.53 % (5.19 % QUESTION 7 You want to buy a new sports car 5 years from now, and you plan to save $9,700 per year, beginning one year from today. You will deposit your savings in an account that pays 3.2% interest. How much will you have just after you make the 5th deposit, 5 years from now? 351,761.08 539,221 48 O $58,454.15 Od $60,565.55 551,704.93 QUESTION 14 Kem Corporation's 5-year bonds yield 6.60% and 5-year T-bonds yield 3.40%. The real risk-free rate is r-2.5%, the default risk premium for Kern's bonds is DRP-1.90% versus zero for T-bonds, the liquidity premium on Kern's bonds is LP 1.3%, and the maturity risk premium for all bonds is found with the formula MRP-(t-1) 0.1%, where t number of years to maturity. What is the inflation premium (IP) on all 5-year bonds? O a 0.38% Ob.0.54% 0.0.0.50% O d. 0.51% (= 0,48 % QUESTION 15 Moerdyk Corporation's boods have a 15-year maturity, a 7.25% semianmaal coupon, and a par value of $1,000. The going interest rate (rd) is 5.30%, based on semiannual compounding. What is the bond's price? &$1,200.05 Ob$1,500.06 Oc$1,224.05 Od $948.04 = $1,164,05 Click Save and Submit QUESTION 9 You just inherited some money, and a broker offers to sell you an annuity that pays $36,800 at the end of each year for 20 years. You could earn 4% on your money in other investments with equal risk. What is the most you should pay for the annuity? Oa. $544,957.21 Ob. $536,582.60 O $580,054.02 Ⓒd. $500,124.01 Oe. $555,425.46 QUESTION 10 What's the rate of return you would earn if you paid $52,000 for a perpetuity that pays $2355 per year? O.3.42% b.4.53% e-7.53 % (5.19 % QUESTION 7 You want to buy a new sports car 5 years from now, and you plan to save $9,700 per year, beginning one year from today. You will deposit your savings in an account that pays 3.2% interest. How much will you have just after you make the 5th deposit, 5 years from now? 351,761.08 539,221 48 O $58,454.15 Od $60,565.55 551,704.93 QUESTION 14 Kem Corporation's 5-year bonds yield 6.60% and 5-year T-bonds yield 3.40%. The real risk-free rate is r-2.5%, the default risk premium for Kern's bonds is DRP-1.90% versus zero for T-bonds, the liquidity premium on Kern's bonds is LP 1.3%, and the maturity risk premium for all bonds is found with the formula MRP-(t-1) 0.1%, where t number of years to maturity. What is the inflation premium (IP) on all 5-year bonds? O a 0.38% Ob.0.54% 0.0.0.50% O d. 0.51% (= 0,48 % QUESTION 15 Moerdyk Corporation's boods have a 15-year maturity, a 7.25% semianmaal coupon, and a par value of $1,000. The going interest rate (rd) is 5.30%, based on semiannual compounding. What is the bond's price? &$1,200.05 Ob$1,500.06 Oc$1,224.05 Od $948.04 = $1,164,05 Click Save and Submit QUESTION 9 You just inherited some money, and a broker offers to sell you an annuity that pays $36,800 at the end of each year for 20 years. You could earn 4% on your money in other investments with equal risk. What is the most you should pay for the annuity? Oa. $544,957.21 Ob. $536,582.60 O $580,054.02 Ⓒd. $500,124.01 Oe. $555,425.46 QUESTION 10 What's the rate of return you would earn if you paid $52,000 for a perpetuity that pays $2355 per year? O.3.42% b.4.53% e-7.53 % (5.19 % QUESTION 7 You want to buy a new sports car 5 years from now, and you plan to save $9,700 per year, beginning one year from today. You will deposit your savings in an account that pays 3.2% interest. How much will you have just after you make the 5th deposit, 5 years from now? 351,761.08 539,221 48 O $58,454.15 Od $60,565.55 551,704.93 QUESTION 14 Kem Corporation's 5-year bonds yield 6.60% and 5-year T-bonds yield 3.40%. The real risk-free rate is r-2.5%, the default risk premium for Kern's bonds is DRP-1.90% versus zero for T-bonds, the liquidity premium on Kern's bonds is LP 1.3%, and the maturity risk premium for all bonds is found with the formula MRP-(t-1) 0.1%, where t number of years to maturity. What is the inflation premium (IP) on all 5-year bonds? O a 0.38% Ob.0.54% 0.0.0.50% O d. 0.51% (= 0,48 % QUESTION 15 Moerdyk Corporation's boods have a 15-year maturity, a 7.25% semianmaal coupon, and a par value of $1,000. The going interest rate (rd) is 5.30%, based on semiannual compounding. What is the bond's price? &$1,200.05 Ob$1,500.06 Oc$1,224.05 Od $948.04 = $1,164,05 Click Save and Submit QUESTION 9 You just inherited some money, and a broker offers to sell you an annuity that pays $36,800 at the end of each year for 20 years. You could earn 4% on your money in other investments with equal risk. What is the most you should pay for the annuity? Oa. $544,957.21 Ob. $536,582.60 O $580,054.02 Ⓒd. $500,124.01 Oe. $555,425.46 QUESTION 10 What's the rate of return you would earn if you paid $52,000 for a perpetuity that pays $2355 per year? O.3.42% b.4.53% e-7.53 % (5.19 % QUESTION 7 You want to buy a new sports car 5 years from now, and you plan to save $9,700 per year, beginning one year from today. You will deposit your savings in an account that pays 3.2% interest. How much will you have just after you make the 5th deposit, 5 years from now? 351,761.08 539,221 48 O $58,454.15 Od $60,565.55 551,704.93
Expert Answer:
Answer rating: 100% (QA)
14 Option C is the correct answer 050 15 Par Value or Maturity Value 1000 Annual coupon rate 725 Sem... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
What is the appropriate number of years to project a firm's financial statement?
-
The real risk free rate is 2.5%. The maturity risk premium is .1% for 1-year maturities, growing by .2% per year up to a maximum of 1.0%. The interest rate on 4-year treasuries (federal government...
-
The Swiss risk free rate is 7.15%. If the Swiss national market return has a mean of 11% and a standard deviation was 24.4%, what is the ex-post return/risk performance of the market?
-
Match the accounting terminology to the definitions. 1. Sarbanes-Oxley Act 2. Internal control 3. Encryption 4. Separation of duties 5. Internal auditors
-
Every week, more and more apps (applications) are available for Droid-based smart phones. How does this affect the optimal price for Droid-based smart phones?
-
Explain events and their importance in dynamic modeling.
-
What is the purpose of an API and an SDK? Provide an example of how a business might make use of an API or SDK.
-
Regression, activity-based costing, choosing cost drivers Fitzgerald Manufacturing has been using activity-based costing to determine the cost of product X-678. One of the activities, "Inspection,"...
-
(2) Write Java code to prompt the user for the starting number to print (e.g. 5) and output rectangular pattern below: Use nested for-loops. Enter the value of n: 5 5 5 5 5 5 5 555 5 4 4 4 4 4 4 4 5...
-
WAR (We Are Rich) has been in business since 1985. WAR is an accrual method sole proprietorship that deals in the manufacturing and wholesaling of various types of golf equipment. Hack & Hack CPAs...
-
In a construction 3D printing project, we use a gantry printer with a printing speed of 120mm/s. The nozzle traveling distance (including the openings) per layer is 72 meters, and the height of the...
-
Use the limit definition of the derivative (f'(c) = lim h0 Find f'(3) where f(x) = 2x - x + 3. f'(3) = Enter an exact number. f(c + h) - f(c) h to evaluate the requested derivative.
-
The unit circle and trig values Tasks: Use "The Unit Circle" to find the exact value of each trigonometric function 1. cos 3 / 4 2. tan 2/3 3. cot /2 4. sec (-/4) 5. tan 5/4 6. csc (-5/6)
-
You have decided that you do not want to take the final exam in this class. Explain how you would negotiate this request with the instructor. Consider the location, timelines, previous relationship,...
-
Wisconsin Art and Greeting Case At first, Tammy Reinhold didn't believe the rumors. Now that the rumors were confirmed, she was in denial. I can't believe it, she said. I've worked here as a greeting...
-
Using a multi-business organization of your choice in Zambia, illustrate the concept of SBU. Discuss the levels of business strategy you have identified and demonstrate how goals and objectives vary...
-
The following table shows data obtained from a single-stage traixial compression test on a cylindrical rock sample, conducted with closed loop servo- control, at a confining stress of 10 MPa, and at...
-
For the following exercises, find the area of the triangle. Round to the nearest hundredth. 22 50 36
-
What is an amortized loan? What is an amortization schedule and how is it used?
-
Suppose r RF = 8%, r M = 11%, and r B = 14%. a. Calculate stock Bs beta, b. If stock Bs beta were 1.5, what would be Bs new required rate of return?
-
The president of United Semiconductor Corporation made this statement in the companys annual report: Uniteds primary goal is to increase the value of the common stockholders equity over time. Later...
-
Given that the barometer reads 2.5 atmospheres at a certain point, what is the relative pressure and the absolute pressure at that point?
-
What is the viscosity of the fluid? Why is the viscous shear stress in the fluid proportional to the rate of shear deformation, but not the amount of shear deformation?
-
For air and water, if the volume is compressed by 1%, what is the increase in pressure?
Study smarter with the SolutionInn App