Business, 10.02.2020 23:08, Sourcandy

Assume that the term structure is flat with a 20% rate. At the end of one year there is the possibility of a single, parallel shift in interest rates either to 24% or to 16% or rates could stay the same. Assume annual compounding. Suppose you have a two- year holding period. Under the three interest rate scenarios, what would be the future value of your investment at the end of two years for the following bond investments if you reinvest the coupon payments at the then-prevailing market rate?

A $1000, 2-year bond with a 20% coupon payment.
b. A $1000, 5-year bond with a 20% coupon payment (i. e., you sell the bond after two years).
c. A 2-year zero coupon bond with a face value of $1,440.

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answered: Guest

Your answer is c the bank manager might not improve a loan people take big risks when they ask there bank for a loan.

answered: Guest

Setiap tindakan memiliki reaksi. ucapan itu ditulis oleh newton. itulah hukum ketiga-nya.

answered: Guest

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans.

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.

answered: Guest

Answerprice per unit; plz check first;

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Assume that the term structure is flat with a 20% rate. At the end of one year there is the possibil...