a.
To calculate: The current price of the bond of Ms. Bright.
Introduction:
Bond:
It is a long-term loan borrowed by corporations, organizations, or the government for the
purpose of raising capital. It is issued at fixed interest depending upon the reputation of the
corporation and also termed as fixed-income security.
b.
To calculate: The dollar profit on the basis of bond's current price with an assumption that the bond was bought three years ago at a price of $1,050.
Introduction:
Bond:
It is a long term loan borrowed by corporations, organizations, or the government for the
purpose of raising capital. It is issued at fixed interest depending upon the reputation of the
corporation and also termed as fixed-income security.
c.
To calculate: The amount of purchase price of $1,050 that Ms. Bright paid in cash.
Introduction:
Bond:
It is a long-term loan borrowed by corporations, organizations, or the government for the
purpose of raising capital. It is issued at fixed interest depending upon the reputation of the
corporation and also termed as fixed-income security.
d.
To calculate: The percentage return on the cash investment by Ms. Bright.
Introduction:
A rate that shows the net profit or loss, an investor earns or loses on the investment over a particular time period is termed as the rate of return.
e.
To explain: The reason for the higher returns of Ms. Bright.
Introduction:
Bond:
It is a long-term loan borrowed by corporations, organizations, or the government for the
purpose of raising capital. It is issued at fixed interest depending upon the reputation of the
corporation and also termed as fixed-income security.
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Foundations of Financial Management
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