Suppose that an investor wants to purchase a discount bond that pays $4,500 in one year. If
Question:
Suppose that an investor wants to purchase a discount bond that pays $4,500 in one year. If the interest rate is 4%, then what is the absolute most the investor would be willing to pay to buy this discount bond?
(a) $4,010.10
(b) $3,989.77
(c) $4,445.72
(d) $4,326.92
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 61% (13 reviews)
d 432692 Computati...View the full answer
Answered By
Somshukla Chakraborty
I have a teaching experience of more than 4 years by now in diverse subjects like History,Geography,Political Science,Sociology,Business Enterprise,Economics,Environmental Management etc.I teach students from classes 9-12 and undergraduate students.I boards I handle are IB,IGCSE, state boards,ICSE, CBSE.I am passionate about teaching.Full satisfaction of the students is my main goal.
I have completed my graduation and master's in history from Jadavpur University Kolkata,India in 2012 and I have completed my B.Ed from the same University in 2013. I have taught in a reputed school of Kolkata (subjects-History,Geography,Civics,Political Science) from 2014-2016.I worked as a guest lecturer of history in a college of Kolkata for 2 years teaching students of 1st ,2nd and 3rd year. I taught Ancient and Modern Indian history there.I have taught in another school in Mohali,Punjab teaching students from classes 9-12.Presently I am working as an online tutor with concept tutors,Bangalore,India(Carve Niche Pvt.Ltd.) for the last 1year and also have been appointed as an online history tutor by Course Hero(California,U.S) and Vidyalai.com(Chennai,India).
4.00+
2+ Reviews
10+ Question Solved
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Question Posted:
Students also viewed these Corporate Finance questions
-
If the interest rate is 4% on euro deposits and 2% on dollar deposits, while the euro is trading at $1.30 per euro, what does the market expect the exchange rate to be one year from now?
-
If the interest rate is 6% per year, how long will it take for your money to quadruple in value? If the inflation rate is 4% per year, what will be the change in the purchasing power of your money...
-
If the interest rate is 5 percent and cash flows are $3,000 at the end of year one and $5,000 at the end of year two, then the present value of these cash flows is: A. $7,392.29. B. $8,400.34. C....
-
Evaluate triple integrate (x^2+y^2+z^2)dx dy dz where R denotes the region bounded by x = 0, y = 0, z = 0 and x + y + z = a, (a > 0)
-
The following facts represent the audited financial statements of a public company for 2011 and 2010, along with management's representation regarding the unaudited amounts (i.e., the UNAUDITED...
-
Coca Cola's dividend is $1/share per quarter. On average, the dividends are expected to grow by 2% per quarter. Assuming the expected return of the stock is 5% per quarter. What is the share price...
-
The following is the distribution of the hourly number of trucks arriving at a company's warehouse: Find the mean of this distribution, and using it (rounded to one decimal place) as the parameter...
-
Holdaway Company is preparing financial statements for the calendar year 2012. The following totals for each account have been verified as correct: Office Supplies on Hand. . . . . . . . . . . . . ....
-
Beale Manufacturing Company has a beta of 1.5, and Foley Industries has a beta of 0.80. The required return on an index fund that holds the entire stock market is 14%. The risk-free rate of interest...
-
The file Delldata.xlsx (available on the companion website) contains monthly returns for the Standard & Poor's stock index and for Dell stock. The beta of a stock is defined as the slope of the...
-
Below are balance sheet and income statement data for Eunice Burns Company. Additional information for Eunice Burns Company is as follows: (a) Bad debt expense of $160 is included in selling and...
-
Tom Cruise Lines, Inc., issued bonds five years ago at $1,000 per bond. These bonds had a 25-year life when issued and the annual interest payment was then 12 percent. This return was in line with...
-
Given that sin 31 = 0.5150 and cos 31 = 0.8572, find the specified function value. tan 59
-
Sometimes there are no rules that directly cover a situation. What should the IA rely on to make the appropriate decision?
-
If Edward purchases $150 worth of casualty insurance at $1.25 per $1,000 of coverage, how much coverage does he have? Explain
-
Brian is designing a skate park and wants to build a curved ramp ( quarterpipe ) that leads skaters to a straight ramp. Brian plans that skaters will drop into the quarterpipe from rest and launch...
-
0/4 points If you contribute $275 every two weeks, starting in two weeks, into a retirement plan that pays 3% compounded monthly, how much interest will you earn after 10 years? Express your answer...
-
A soil sample was taken using a cylindrical core. The soil and core weighed 230 g. The mass of the core sampler is 78 g, has a height of 5 cm, and a diameter of 5 cm. After oven-drying at 105...
-
You have been hired as a consultant to evaluate the performance of a board of directors. What things would you look for? Why would shareholders want to hire a consultant to do such a job, when the...
-
An annual report of The Campbell Soup Company reported on its income statement $2.4 million as equity in earnings of affiliates. Journalize the entry that Campbell would have made to record this...
-
Discuss the constraints on using genetic programming techniques to solve problems. For example, what components of a solution cannot be evolved within the genetic programming paradigm?
-
Bevans Co. makes two products, Product X and Product Y. Bevans has produced Product X for many years without generating any hazardous wastes. Recently, Bevans developed Product Y, which is superior...
-
Refer to Case 7-57, which describes Kwik Cleans environmental costs. Required (a) Of the costs listed by Pat Polley, identify which are explicit and which are implicit environmental costs. (b) Should...
-
Financial accounting statements are used by many parties. Describe how each of the following parties might use them; Security Analysts and Shareholders, bank loan officers, a companys customers and...
-
The Pallon Company manufactures a variety of handerated bed frames. The company's manufacturing activitiesor the current Sear follow:Manufacturing Activity Estimated Cost Cost Driver Used as...
-
A company's inventory records indicate the following data for the month of April: Date Activities Units Acquired at Cost Units Sold at Retail April 1 Beginning inventory 8 2 0 units @ $ 3 6 = $ 2 9 ,...
-
How do authors employ intertextual allusions to enrich the layers of meaning in their works and establish connections across disparate literary traditions?
Study smarter with the SolutionInn App