Which of the following has the highest interest rate? Select one: O a. Corporate Bond b. Government Bond c. Treasury Bills d. Callable Corporate Bond
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A: Bond's coupon rate refers to interest paid to the issuers on the bond's face value.
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A: Debt financing is when a company raises money with the use of debt instruments.
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A: Answer are as follows
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A: Introduction: Value of the bond depends on the following factors: Coupon rate Yield to maturity…
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A:
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A: Bond-rating It is a method for estimating a bond's financial soundness which relates to a…
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A: The issuers of bonds are the companies or organizations that issue the bond. The big issuers are…
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Q: What variables influence bond market rates
A: This question deals with the variables influence bond market rates
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Q: a) What are the important bond features. Describe each feature what they indicate. What are Discount…
A: Hi student Since there are multiple questions, we will answer only first question.
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Q: Define Treasury bond (T-bond)
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A: Answer shares and bonds having maturity of more than one year are not considered as money market…
Q: Are bonds considered as fixed income securities?
A: Bonds are a type of loan taken by the borrower that promises to pay a certain sum as an interest to…
Q: What are the major advantages of using issuing bonds?
A: Bond is one of sources for the company to raise the funds. Bonds can be issued at par or at premium…
Q: What are two important characteristics that determine the issuance price of a bond?
A: Following are the two characteristics that determine the issuance price of a bond: The riskiness of…
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- 3. Assume you purchased a bond for $9,186. The bond pays $300 interest every six months. You sell the bond after 18 months for $10,000. Calculate the following: a. Income. b. Capital gain (or loss). c. Total return in dollars and as a percentage of the original investment. Review Only Click the icon to see the Worked Solution. a. The current income is $ (Round to the nearest dollar.) b. The capital gain (or loss) is $ (Enter a loss as a negative number and round to the nearest dollar.) c. The total return in dollars is $ (Round to the nearest dollar.) The total return as a percentage of the original investment is %. (Enter as a percentage and round to two decimal places.)In the example below, we will use year-end assets. Bank A receives $70 in deposits at 5% and, together with 40 in equity, makes a loan of $90 at 7%. The remaining of assets is G-Bond. We will ignore taxes for the moment. NIM=Profit/Interest revenue Bank A Loan 7% $90 G-Bond 5% ? Deposits 5% $70 Equity $40 Total Assets $? Total Equity and Deposit $110 The amount of G-bond is $50 $70 $20 $40 $80 $60 $30 $10A corporate bond that you own at the beginning of the year is worth $915. During the year, it pays $53 in interest payments and ends the year valued at $905. What was your dollar return and percent return? (Round "Percent return" to 2 decimal places.) Dollar return Percent return
- Consider the following Balance Sheet for Forward Thinking Commercial Bank(FTCB) (in millions) ASSETS LIABILITIES Floating rate mortgages 250 Demand deposits 300 (currently 14% annually) (currently 5% annually) 30 years fixed rate loans 1 year CD 50 (currently 9% annually) 120 (currently 8% annually) Equity 20 370 370 a. What is FTCB expected net interest income (NII) at year end? b. What is FTCB expected net interest income at year end if interest rates fell by seven percent (7%). c. What is FTCB expected net interest income at year end if interest rates grew by 300 basis points on assets, but decline by 2% on liabilities.Consider the following Balance Sheet for Cutting Edge Commercial Bank(CECB) (in millions) ASSETS LIABILITIES Floating rate mortgages 120 Demand deposits 110 (currently 14% annually) (currently 5% annually) 30 years fixed rate loans 1 year CD 50 (currently 9% annually) 80 (currently 8% annually) Equity 40 200 200 1. What is CECB expected net interest income (NII) at year-end? 2. What is CECB expected net interest income at year end if interest rates fell by seven percent (7%). 3. What is CECB expected net interest income at year end if interest rates grew by 300 basis points on assets, but decline by 2% on liabilities.Use the following information about IGI security dealer. Market yields are in parenthesis, and amounts are in millions. Assets Liabilities and Equity Cash $10 Overnight Repos $170 1 month T-bills (7.05%) 75 Subordinated debt 3 month T-bills (7.25%) 75 7-year fixed rate (8.55% 150 2 year T-notes (7.50%) 50 8 year T-notes (8.96%) 100 5 year munis (floating rate) (8.20% reset every 6 months) 25 Equity 15…
- Suppose you borrow from a bank $1,756.06 today (t=0). You agree to pay back $3,637.64 in 4 years (t=4). The interest rate (%) that the bank charge you is closest to ________%. Input your answer without the % sign and round your answer to two decimal places.Question 1 (a) Explain the differences between annual percentage rate (APR) and effective annual rate (EAR). (b) Phoebe is considering selling her entire stock holding and depositing the money ($500,000 in total) into a bank account. She has obtained the following information about two banks: Bank X: 12% APR with monthly compounding Bank Y: 13% APR with semi-annual compounding (i) Based on the comparison of the yearly rate of return, which bank would Phoebe prefer? Provide supporting calculations. (ii) How much money will Phoebe have in Bank X’s account five years from now if the money remains in the account during the period? Provide supporting calculations. (iii) How much money will Phoebe have in Bank X’s account if the interest earned is withdrawn at the end of each month to pay for living expenses of the following month? Explain (without calculation) in NO MORE THAN THREE LINES your answer. (iv) Explain the difference in the bank account balance in parts (ii) and (iii), with…A Treasury bond that you own at the beginning of the year is worth $1,020. During the year, it pays $32 in interest payments and ends the year valued at $1,030.What was your dollar return and percent return? (Round "Percent return" to 2 decimal places.)
- Consider the following balance sheet for Whiz Financial Services Limited: Assets K Liabilities K Cash 6.25 Equity 25.00 Short term consumer loans (1 yr maturity)62.50 Demand deposits 50.00 Long term consumer loans (2 yr maturity)31.25 Client Savings accounts 37.50 3 month T-Bills 37.50 3 month CDs 50.00 6 month T-Bills 43.75 3 months Bankers Acceptances 25.00 3 year T-Bonds 75.00 6 month commercial paper 75.00 10 year, fixed rate mortgages 25.00…I. An investor purchases a bond worth Rp. 100 million, with a 15% interest tax on the bond. The investor is faced with two different cases. Case 1: Annual inflation = 0.5%, nominal interest rate = 3.17% / yearCase 2: Annual inflation = 2.96%, nominal interest rate = 5.63% / year a. In which cases do the investors receive the highest real returns? Explain. b. In which case did the investor pay the highest taxes? Explain. c. If you can choose, which is the best case for investors to buy bonds? Explain.Consider the following Balance Sheet for Forward Thinking CommercialBank(FTCB) (in millions) Assets Liabilities Floating rate mortgages (currently 14% annually) 250 Demand deposits (currently 5% annually) 300 30 years fixed rate loans 120 1 year CD (currently 8% annually) 50 Equity 20 370 370 a. What is FTCB expected net interest income (NII) at year end? b. What is FTCB expected net interest income at year end if interest rates fell by seven percent (7%). c. What is FTCB expected net interest income at year end if interest rates grew by 300 basis points on assets, but decline by 2% on liabilities.