Getty Markets has bonds outstanding that have a real return of 3.08 percent. The current rate...
Getty Markets has bonds outstanding that have a real return of 3.08 percent. The current rate of inflation is 3.1 percent. What is the nominal rate of return on these bonds?
Please show work.
Homework Answers
| Real return: 3.08% | |||||
| Inflation rate: 3.01% | |||||
| Real return = (1+ nominal rate)/ (1+ Inflation rate) - 1 | |||||
| 3.08% = (1+Nominal rate) / 1.0301 - 1 | |||||
| 1.0308 = (1+ Nominal rate) /1.0301 | |||||
| 1+ Nominal rate = 1.0308*1.0301 | |||||
| 1+ nominal rate = 1.0618 | |||||
| Nominal rate = 6.18% | |||||
Add Answer to:
Getty Markets has bonds outstanding that have a real return of
3.08 percent. The current rate...
8. Getty Markets has bonds outstanding that have a real return of 3.08 percent. The current...
8. Getty Markets has bonds outstanding that have a real return of 3.08 percent. The current rate of inflation is 3.1 percent. What is the nominal rate of return on these bonds? 6.28% Please Show All work
1. Getty Markets has bonds outstanding that have a real return of 3.08 percent. The current...
1. Getty Markets has bonds outstanding that have a real return of 3.08 percent. The current rate of inflation is 3.1 percent. What is the nominal rate of return on these bonds? 6.28% Please show all work typed as I can't see much on mobile.
The 7 percent bonds issued by Modern Kitchens pay interest semiannually, mature in eight years, and...
The 7 percent bonds issued by Modern Kitchens pay interest semiannually, mature in eight years, and have a $1,000 face value. Currently, the yield to maturity for these bonds is 7.22%. What is the market price per bond? $986.81 S.S. Corporation’s bonds will mature in 15 years. The bonds have a face value of $1,000 and an 6.5 percent coupon rate, paid semiannually. The price of the bonds is $1,050. What is the yield to maturity? 5.99% Callaghan Motor’s bonds...
Tri-County Hauling has bonds outstanding that pay a 6 percent coupon, have a 5.47 percent yield to maturity, and a face...
Tri-County Hauling has bonds outstanding that pay a 6 percent coupon, have a 5.47 percent yield to maturity, and a face value of $1,000. The current rate of inflation is 3.2 percent. What is the real rate of return on these bonds? a. 0.53 percent b. 2.71 percent c. 2.20 percent d. 2.80 percent e. 2.27 percent
15. Redesigned Computers has 7 percent coupon bonds outstanding with a current market price of $687.00....
15. Redesigned Computers has 7 percent coupon bonds outstanding with a current market price of $687.00. Interest is paid annually. The yield to maturity is 12 percent and the face value is $1,000. How many years is it until these bonds mature? A. 6.64 years B. 7.35 years C. 12.28 years D. 18.14 years E. 23.87 years 16. Today, you want to sell a $1,000 face value zero coupon bond you currently own. The bond matures in 5 years. How...
1. The Fishing Pier has 6.20 percent, semi-annual bonds outstanding that mature in 12 years. The...
1. The Fishing Pier has 6.20 percent, semi-annual bonds outstanding that mature in 12 years. The bonds have a face value of $1,000 and a market value of $1,007. What is the yield to maturity? 5.84 percent 6.05 percent 6.12 percent 5.89 percent 2. The 6 percent, semi-annual bonds issued by Black Water Mills mature in 9 years and have a face value of $4,600. What is the current value of one of these bonds if the market rate of...
If your nominal rate of return is 9 percent and your real rate of return is 5 percent, what is the inflation rate?
If your nominal rate of return is 9 percent and your real rate of return is 5 percent, what is the inflation rate?
please answer all parts on a piece of paper Exercises: Parity conditions in real markets and...
please answer all parts on a piece of paper
Exercises: Parity conditions in real markets and financial markets EXERCISE 8 (Fisher effect & Purchasing Power Parity) If expected inflation is 100 percent in Venezuela and the real required return is 5 percent. a) What will the nominal interest rate be according to the Fisher effect? b) What can we expect to happen with the exchange rate of $/Bolivar, taking the different inflation rates into consideration, assuming that USA inflation is...
If the current inflation rate is 2.2% and you are earning a real rate of return...
If the current inflation rate is 2.2% and you are earning a real rate of return on investment of 3.8%, then the nominal rate on this investment is closest to (please use the formula; NOT the approximation): 6.8% 6.08% 6.2% 6.0%
A bond yielded a real rate of return of 3.87 percent for a time period when...
A bond yielded a real rate of return of 3.87 percent for a time period when the inflation rate was 3.75 percent. What was the actual nominal rate of return?
15. Redesigned Computers has 7 percent coupon bonds outstanding with a current market price of $687.00. Interest is paid annually. The yield to maturity is 12 percent and the face value is $1,000. How many years is it until these bonds mature? A. 6.64 years B. 7.35 years C. 12.28 years D. 18.14 years E. 23.87 years 16. Today, you want to sell a $1,000 face value zero coupon bond you currently own. The bond matures in 5 years. How...
please answer all parts on a piece of paper
Exercises: Parity conditions in real markets and financial markets EXERCISE 8 (Fisher effect & Purchasing Power Parity) If expected inflation is 100 percent in Venezuela and the real required return is 5 percent. a) What will the nominal interest rate be according to the Fisher effect? b) What can we expect to happen with the exchange rate of $/Bolivar, taking the different inflation rates into consideration, assuming that USA inflation is...
Most questions answered within 3 hours.
-
A 1.3 eV electron has a 10-4 probability of tunneling
through a 2.4 eV potential barrier....
asked 12 minutes ago -
What is the one ingredient that is common to being successful
with all stakeholders?
profit
trust...
asked 11 minutes ago -
Write an assembly language 32 bit program that reads in lines of
text by a .txt...
asked 14 minutes ago -
what is the density ( in g/L) of hydrogen gas at 29 degrees C and a...
asked 23 minutes ago -
5-6. You are considering three investment alternatives for some
spare cash: Old Reliable Corporation stock (A1),...
asked 14 minutes ago -
Problem 16-02
Receivables Investment
Medwig Corporation has a DSO of 45 days. The company averages
$7,250...
asked 29 minutes ago -
Mr. Brown hired Lowe's Maintenance Services Limited to repair
and paint the exterior wall of his...
asked 30 minutes ago -
When might an index slow down the overall performance of the
database? Choose the best answer....
asked 35 minutes ago -
Due to a recession, expected inflation this year is only 2.25%.
However, the inflation rate in...
asked 36 minutes ago -
Write four functions: (IN PYTHON 3)
1) bound(l) - given a list of integers l, compute...
asked 39 minutes ago -
A quarterback throws a football. When the football leaves his
hand, it has a horizontal velocity...
asked 46 minutes ago -
he term "reproductive isolation mechanism" refers to
inability of a species to continue reproduction
specific areas...
asked 49 minutes ago