Five years ago, Castles in the Sand Inc. issued bonds at a face value of $1,000 at a yield to maturity of 4%. Now, with eight years left until the maturity of the bonds, the company has run into hard times, and the yield to maturity on the bonds has increased to 11%.

1). What is the price of the bond now? (Assume semiannual coupon payments.)


2). Suppose that investors believe that Castles can make good on the promised coupon payments but that the company will go bankrupt when the bond matures and the principal comes due. The expectation is that investors will receive only 50% of face value at maturity. If they buy the bond today, what yield to maturity do they expect to receive?

Answers

Answer 1

A. The price of the bond is $556.25.

B. The yield to maturity expected by investors is 20.36%.

What is YTM?

Yield to maturity (YTM) is the total rate of return that will have been earned by a bond when it makes all interest payments and repays the original principal.

here, we have,

A. The price of the bond is calculated using the formula:

P = C × (1 − (1 + YTM/2)−2T ) ÷ (YTM/2) + (1 + YTM/2)−2T

Here, C is the coupon payment, YTM is the yield to maturity and T is the time to maturity in years.

Face value = $1,000

YTM = 8.2%

Time to maturity = 7 years

Coupon payment = 8.2% × $1,000 = $82

Substituting these values in the formula, we get:

P = $82 × (1 − (1 + 0.082/2)−14 ) ÷ (0.082/2) + (1 + 0.082/2)−14

P = $82 × (1 − 0.6774) ÷ 0.041 + 0.6774

P = $556.25

B. The yield to maturity expected by investors is calculated using the formula:

YTM = 2 × (C × (1 + YTM/2)−2T + (FV − P) × (1 + YTM/2)−2T ) ÷ P

Here, C is the coupon payment, YTM is the yield to maturity, FV is the face value of the bond and P is the price of the bond.

Expected face value at maturity = 85% × $1,000 = $850

Substituting these values in the formula, we get:

YTM = 2 × ($82 × (1 + YTM/2)−14 + ($850 − $556.25) × (1 + YTM/2)−14 ) ÷ $556.25

YTM = 2 × ($82 × (1 + YTM/2)−14 + ($293.75) × (1 + YTM/2)−14 ) ÷ $556.25

YTM = 2 × ($82 × 0.6774 + ($293.75) × 0.6774) ÷ $556.25

YTM = 2 × ($55.35 + ($198.57) ) ÷ $556.25

YTM = 2 × $253.92 ÷ $556.25

YTM = 0.2036 = 20.36%

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Related Questions

Need help ASAP

the value of each variable. If your answer is not
teger, express it in simplest radical form.
The length of a is
The length of b is
(Simplify your answer.)

Answers

Answer:

me too (help)

Step-by-step explanation:

if 9% of a number equals 10 find 27% of that number​

Answers

Answer:

30

Step-by-step explanation:

You divide the number so 10 by 9 giving you the 1% of it and then you times that number by 27 to get 27%.

Answer:

30

Step-by-step explanation:

9%*3=27%

10*3=30

or more simply what you do to one you have to do to the other.

please help me with trigonometry

Answers

The length of the guy wire to the nearest foot would be = 10 ft.

How to calculate the length of the guy wire?

The relationship between the tower, guy wire and pole forms the shape of a right angle triangle.

The distance from the stake to the pole (opposite) =a = 5 ft

The distance from the pole to the tower (adjacent) =b= 9ft

The length of the guy wire= c = X

Using the Pythagorean formula:

c² = a² + b²

c² = 5² + 9²

c² = 25+81

c² = 106

C = √106

C= 10 ft ( to the nearest foot)

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Complete question:

A guy wire runs from the top of a cell tower to a metal stake in the ground. Sophie places a 7 ft tall pole to support the guy wire. After placing the pole, Sophie measures the distance from the stake to the pole to be 5 ft. She then measures the distance from the pole to the tower to be 9 ft. Find the length of the guy wire, to the nearest foot.

The number of trout in a stocked lake is given by the
equation T = 1800 (1.15)n where n is the number of months since the start of the trout season.

a. How many trout will there be in 2.5 months?

b. How many trout were there 2 months before the season opened?

Answers

a. To find the number of trout in 2.5 months, we can substitute n = 2.5 into the given equation:

T = 1800 (1.15)^n

T = 1800 (1.15)^2.5

T ≈ 2708.67

Therefore, there will be approximately 2,709 trout in the lake after 2.5 months.

b. To find the number of trout 2 months before the season opened, we need to use a negative value of n that represents the time before the start of the trout season. If we assume that the start of the season is month 0, then 2 months before the start of the season would be month -2. Thus, we can substitute n = -2 into the given equation:

T = 1800 (1.15)^n

T = 1800 (1.15)^(-2)

T ≈ 980.92

Therefore, there were approximately 981 trout in the lake 2 months before the start of the trout season.

Which graph represents the solution to the inequality 0.5 is greater than or equal to the product of a number and −0.25?
A. number line with closed circle on 0.5 with arrow shaded right
B. number line with open circle on point on negative 0.5 with arrow shaded left
C. number line with closed circle on negative 2 with arrow shaded right
D. number line with open circle on 2 with arrow shaded left

Answers

Option C i.e. number line with closed circle on negative 2 with arrow shaded right represents the solution to the inequality.

What is inequality?

An inequality is a comparison relationship between two or more mathematical expressions.

We are given an inequality as 0.5 is greater than or equal to the product of a number and −0.25.

Let the number be x.

So, from the above information, we get the inequality as

0.5 ≥ -0.25x

Now, on solving the above inequality, we get the following

0.5 ≥ -0.25x

On multiplying by -1, we get

⇒-0.5 ≤ 0.25x

On dividing both sides by 0.25, we get

-2 < x

Hence, Option C i.e. number line with closed circle on negative 2 with arrow shaded right represents the solution to the inequality.

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Consider the quadratic function f(x) = x2 – 5x + 12. Which statements are true about the function and its graph? Select three options. The value of f(–10) = 82 The graph of the function is a parabola. The graph of the function opens down. The graph contains the point (20, –8). The graph contains the point (0, 0).

Answers

[tex]f(x) = x^{2} -5x + 12[/tex]

The graph of the function is a parabola true

____

The value of f(–10) = 82 → false

[tex]f(-10) = (-10)^{2} -5(-10) + 12 = 100+50+12 = 162 \neq 82\\[/tex]

The graph of the function opens down  → false The graph contains the point (20, –8) → false

[tex]f(20) = (20)^{2} -5(20) + 12 = 400-100+12 = 312 \neq - 8\\[/tex]

The graph contains the point (0, 0) → false

[tex]f(0) = 0^{2} -5(0) + 12 = 0 - 0 + 12 = 12 \neq 0\\[/tex]


WILL GIVE BRAINLIEST
(Theoretical Probability MC)
Lloyd has a bag of 3 marbles. There is 1 orange marble, 1 green marble, and 1 blue marble.
List 1 List 2 List 3 List 4
O
0,0 0,0 0,0
G
O, GO, GO, G
B
O, B O, BO, B
G, O G, OG, O
G, B
G, B
G, B
G, G
G, G
G, G
B, B
B, BB, B
B, GB, GB, G
B, O B, O
G, O
O, B
G, B
Which list gives the sample space for pulling 2 marbles from the bag with replacement?
List 1
List 2
List 3
List 4

Answers

Here are the possible outcomes of randomly drawing two marbles from the bag:

O, G

O, B

G, O

G, B

B, O

B, G

There are six possible outcomes in total, each with an equal chance of occurring. Therefore, the theoretical probability of drawing an orange marble and a green marble from the bag is 1/6 or approximately 0.167.

Ocean City bike rental shop charges a $17 fixed fee plus $6 an hour for renting a bike Jessica paid $65 to rent a bike how many hours did she pay to have to write checked out ?

Answers

Answer:

8 hours

Step-by-step explanation:

To solve for the number of hours (h) Jessica paid, we can use this expression:

(65 - 17) ÷ 6 =?

Why do we do this?

We do this because in order to find the total number of hours spent renting the bike, we need to take the total amount of money spent and subtract the fixed fee from it. Then, we divide by 6 to get the total number of hours spent.

Solving what is in the parenthesis:

(65 - 17) ÷ 6 =?48 ÷ 6 =?8

Therefore, Jessica spent 8 hours renting the bike.

Answer is 8 hours of bike rental

Step by step

Your equation can be set up in slope intercept form y = mx + b

m is slope or rate of $6 /hour
b is y intercept or fixed cost of $17
y = $65 paid
x = the unknown hours of bike rental

65 = 6x + 17
Subtract 17 from both sides to isolate variable

65 - 17 = 6x + 17 - 17
Simplify

48 = 6x
Divide both sides by 6 to solve for x

48/6 = 6/6 x
Simplify

8 = x hours of bike rental

Find the slope of the line passing through each of the following pairs of points (-6,-5) (-4,-3)

Answers

The Slope of the line is 1.

The slope of a line:

The slope of a line is a numerical value that shows the stiffness or direction of the line. The formula used to find the Slope of the line is given by  

               Slope (m) = [ y₂ - y₁] / [ x₂ - x₁]  

Where (x₁, y₁) and (x₂, y₂) are pairs of points that pass through the line.

Here we have

The pair of points (-6, -5) and (-4, -3)

By using the formula,

The slope of the line = [ y₂ - y₁] / [ x₂ - x₁]

= [ -3 - (-5) ] / [ -4 - (-6) ]

= [ -3 + 5 ]/ [ -4 + 6 ]

= [ 2/2] = 1

Therefore

The Slope of the line is 1.

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The cost of one burrito b, and one taco a is less than the cost of two burritos. Which
inequality represents this relationship?

b+a<2b
b+a b+a> 2b
b + a ≤ 2b

Answers

Answer:

The inequality that represents this relationship is:

b + a < 2b

Need help on solving this math problem!!

Answers

Answer:Hello!-47 s the answer :)

Step-by-step explanation:

find the code find the quotient write your answer using a decimal and round to the nearest hundredth 8,426 / 82

Answers

Answer:The quotient of 8,426 divided by 82 can be found using long division or a calculator. When rounded to the nearest hundredth, the quotient is:

102.85

Therefore, the answer is 102.85.

Step-by-step explanation:

y= 4x^(3/2)+x^(1/2)
Find the differential of the function.

dy=​

Answers

The differential of the function is dy/dy = 6x^(1/2) + 1/2x^(-1 1/2)

How to find the differential of the function.

From the question, we have the following parameters that can be used in our computation:

y= 4x^(3/2)+x^(1/2)

Using the first principle of differentiation, we have

dy/dy = 3/2 * 4x^(3/2 - 1) + 1/2 * x^(1/2 - 2)

Evaluate the expressions

dy/dy = 6x^(1/2) + 1/2x^(-1 1/2)

Hence, the solution is dy/dy = 6x^(1/2) + 1/2x^(-1 1/2)

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dibuja una línea desde cada ecuación hasta la propiedad de igualdad que ilustra

Answers

Answer:

Lo siento, como modelo de lenguaje de IA, no tengo la capacidad de visualizar o dibujar gráficos. ¿Puedo ayudarte con algo más?

f(t)= 5-2t is the answer -39.1%

Answers

Yeah, your right the answer would be -39.1%

he three data sets have the same mean and range, but is the variation the same? Prove your answer by computing the standard deviation. Assume the data were obtained from samples. (a) 4, 5, 11, 13, 13, 14 (b) 5, 7, 10, 10, 13, 15 (c) 3, 10, 11, 11, 12, 13

Answers

The standard deviations of the data are different.

Standard deviation:

The formula used to calculate the standard deviation of data is given by

         Standard deviation = √[ ∑(x[tex]_{i}[/tex] - x)² /n ]  

x - mean of the data and n = number of observations

Here we have

(a) 4, 5, 11, 13, 13, 14

Mean of the data = [4 + 5 + 11 + 13 + 13 + 14 ]/6 = 60/6 = 10

On calculating deviations

=> ∑(x[tex]_{i}[/tex] - x)² = 96

=> √[ ∑(x[tex]_{i}[/tex] - x)²/n ] = √[ 96/ 6 ] = 4    

(b) 5, 7, 10, 10, 13, 15

Since the mean of the data is equal for all  

On calculating deviations

=> ∑(x[tex]_{i}[/tex] - x)² = 68

=> √[ ∑(x[tex]_{i}[/tex] - x)² /n ] = √[ 68/ 6 ] = 3.36

(c) 3, 10, 11, 11, 12, 13

On calculating deviations

=> ∑(x[tex]_{i}[/tex] - x)² = 64

=> √[ ∑(x[tex]_{i}[/tex] - x)² /n ] = √[ 64/ 6 ] = 3.26  

Therefore,

The standard deviations of the data are different.

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How far away from his was Liam after 15 minutes?

Answers

The requried, Liam is 24 blocks away from his house.

What is a graph?

The graph is a demonstration of curves that gives the relationship between the x and y-axis.

Here,
A graph is shown, Liam left his house and drove to the store. He stopped and went inside. From there, he drove in the same direction until he got to the bank. He stopped and went inside the bank. Then he drove home. The graph below shows the number of blocks away from home Liam is x minutes after he left his house until he got back home.

In order to calculate Liam's distance after x = 15 minutes. Draw a perpendicular at x = 15 that intersects the curve. Since the line intersects the curve at y = 24. This implies that Liam is 24 blocks away from his house.

Thus, the requried Liam is 24 blocks away form his house.

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. A survey was conducted to determine the types of occupations of the 1,200
residents of a town. The types of occupations are shown in the circle graph.
Occupations
Retail
25%
Education
15%
Industry
25%
Other
30%
Government
Based on the circle graph, how many more residents have an occupation in
industry than have an occupation in government?




A.360
B.300
C.240
D. 20

Answers

240 more residents have an occupation in industry than have an occupation in government. The solution has been obtained by using arithmetic operations.

It is believed that the four fundamental operations, often referred to as "arithmetic operations", can describe all real numbers. The four mathematical operations that produce the quotient, product, sum, and difference are divide, multiply, add, and subtract.

We are given a graph determining the types of occupations of the 1,200 residents of a town.

Percentage of residents having occupation in government is:

100% - 25% - 15% - 25% - 30% = 5%

Number of residents having occupation in industry is as follows:

25% of 1200 = 300

Similarly, number of residents having occupation in government is:

5% of 1200 = 60

Number of more residents that have occupation in industry than have an occupation in government is:

300 - 60 = 240

Hence, 240 more residents have an occupation in industry than have an occupation in government.

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The circle graph was missing in the question which has been attached below.

John is seven years younger than his sister Ann. The sum of their ages is 45. Find John's age. (you do not
need to write the equations)

Answers

Answer:

John is 19 and Ann 26

Step-by-step explanation:

to be for real i just counted

Jim was preparing for a marathon. He ran 5 3/8 miles on the first day, 7 1/3 miles the second, and 12 1/2 the third day. How far did he run altogether

Answers

Answer: Jim ran 25 1/4 miles altogether.

Step-by-step explanation: I saw him do it.

Brainliest for correct answer

Answers

Answer:

C 38.1 ft hope this helps

Pls help asap rewarding Brainliest

Answers

Im not fully sure but it might be the 3rd one!

Write a unit rate for the situation.
3600 stitches in 3 minutes

Answers

Answer:Hence, there are 1200 1200 1200 stiches per minute.

Step-by-step explanation:

1200 stitches per minute because 3600 divided by 3 is 1200

Determine whether the study is an experiment or an observational​ study, and then identify a major problem with the study.
In a​ survey, 1465 Internet users chose to respond to this question posted on a​ newspaper's electronic​ edition: "Is news online as satisfying as print and TV​ news?" 52% of the respondents said​ "yes."
Question content area bottom
Part 1
This is an

experiment
observational study
because the researchers

do not attempt to modify
apply a treatment to
the individuals.
Part 2
What is a major problem with the​ study?
A.
This is a convenience sample with voluntary​ response, which has a high chance of leading to bias.
B.
There is no blinding or​ replication, which has a high chance of leading to bias.
C.
The sample is not very large.
D.
The results apply only to Internet users

Answers

The study is classified as an observational study, and the problem is given as follows:

A.

This is a convenience sample with voluntary​ response, which has a high chance of leading to bias.

What are experiments and observational studies?

Experiments are studies in which there are two groups, with different features, and then the effect of a feature is studied.

For an observational study, there are no changes, just a question is asked, as is the case for this problem.

Convenience samples lead to bias as many people that share characteristics can answer.

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63, 00, 22,------? find out next number ​

Answers

The next number is 47, 1, and 27  in the sequence.

What is a number series?

A number series is a sequence of numbers. To answer the questions regarding number series, we must first establish the rules that lead to the production of a number series.

The reverse of 63 is 36.

The sum of the digits of 63 is 6 + 3 = 9.

So, the following number is 36 + 9 = 45, followed by the next odd number, 47. Hence the following number is 47.

The reverse of 00 is 00.

The sum of the digits of 00 is 0 + 0 = 0.

So, the following number is 0 + 0= 0, followed by the next odd number, 0. Hence the following number is 0.

The reverse of 22 is 22.

The sum of the digits of 22 is 2 + 2 = 4.

So, the following number is 22 + 4 = 26, followed by the next odd number, 27. Hence the following number is 27.

Therefore, the next number is 47, 1, and 27  in the sequence.

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Which statements are always true regarding the diagram? Select three options. m∠5 + m∠3 = m∠4 m∠3 + m∠4 + m∠5 = 180° m∠5 + m∠6 =180° m∠2 + m∠3 = m∠6 m∠2 + m∠3 + m∠5 = 180°

Answers

Answer:

Step-by-step explanation:

its 1

Need help with number 90

Answers

Answer:

a = 16.5

b = 8.8

Step-by-step explanation:

What is the vertical asymptote and horizontal asymptote pic attached below

Answers

The required horizontal and vertical asymptote is x = 2, -2, and y = 1/4.

How to find Asymptotes?

To find the vertical asymptotes of the given rational function, we need to look for values of x that make the denominator zero, since division by zero is undefined.

The denominator of the function is 4(x-2)(x+2), so the vertical asymptotes occur at x = 2 and x = -2. Therefore, the vertical asymptotes are:

x = 2, -2

To find the horizontal asymptote, we can use the fact that as x goes to positive or negative infinity, the function approaches the ratio of the leading coefficients of the numerator and denominator.

In this case, the leading term in the numerator is x² and the leading term in the denominator is 4x². Therefore, as x approaches positive or negative infinity, the function approaches:

y = (x² / 4x²) = 1/4

So, the horizontal asymptote is:

y = 1/4

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What is 2^-2 equal to?

A. -4

B. -1/16

C. 1/4

D. 1/2

Answers

Answer:

best of my knowledge hope its right -4

Step-by-step explanation:

if S is 150% of T, then T is what percent of S+T​

Answers

The percentage representation of T as part of S + T as required is; 40 percent.

What is the percentage representation of T as part of S + T?

As evident in the task content;

S is 150% of T.

S = 150/100 × T

S = 1.5T.

Therefore, expressing T as a percentage of S + T as required is as follows;

= (T / (S + T)) × 100%

substitute S = 1.5T into the equation

= T / (T + 1.5T) × 100%

= (1/2.5) × 100%

= 0.4 × 100%

= 40%.

Ultimately, the variable T is 40 percent of S + T.

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Explain how you arrived at your answer. b) EvaluateP(6)andP(24)and explain their meaning in the context of the problem. Use complete sentences. c) Use your calculator to graphP(t)for0t80. Obtain a printout of this graph, label each axis with both a variable and a word label, and label the scale on each axis. d) Describe the shape of the graph in mathematical words (increasing, decreasing, local maximum, local minimum). e) Use the graph to describe the manner in which the rabbit population has changed since the rabbits escaped. f) Does the graph suggest the growth in population you would expect among rabbits on an island. Explain g) Use the graph to estimate how long it will take before there are 500 rabbits. Show this on the graph vou drew. Write the conclusion in sentence. A random survey of seventh- and eighth-grade students was conducted to find out how many hours is spent doing homework each night. Of the two sets of data, which has the greater median? Assume that during a three-hour period spentoutside, a person recorded the temperature and theirwater consumption. The experiment was conductedon 7 randomly selected days during the summer. Thedata is shown in the table. Plot the data on a scatterplot then add a line that is closest to all of the datapoints. Professional photographers focus more on composition than amateur photographers. What difference will this make in the final version of their photographs? PLEASE HELP ASAP, WILL GIVE BRAINLIEST TO FIRST ANSWERWhat type of energy transformation takes place during cellular respiration?Use complete sentences to explain how energy is conserved during cellular respiration. Type your answer here:Table 1. Measurements Taken from a Simulation of a [insert mass value] kg Ball Released from Various Heights on a RampMass of ball (kg) Drop height on-ramp (m) Potential energy (J) Time to travel 1.0 m (s) Speed (m/s) Kinetic energy (J) 0.5 1.0 1.5 2.0 2.5 3.0 Conclusions1. What conclusions can you draw about how the amount of potential energy stored in a system changes as a ball is placed at varying heights on a ramp? Write an evidence-based claim.Type your answer here:2. What conclusions can you draw about how the final kinetic energy of a ball in a system changes as a ball is placed at varying heights on a ramp? Write an evidence-based claim.Type your answer here:3. Develop a model (diagram) that shows how different amounts of gravitational potential energy (GPE) are stored in the earth-ball system when the ball is raised to different heights on the ramp.Type your answer here:4. How did you use what you learned from the first part of the experiment to design a marble run?Type your answer here: Describe two events which seem to give melinda confidence in herself