Mustafa's portfolio consists of an annuity with monthly payments of $1,000 each month for five years and a $20,000 8% eight-year par-value bond bearing semiannual coupons. Calculate the Macaulay duration of the portfolio at 9%. Show ALL the work with formulas and explanations, should NOT use Microsoft Excel Sheet. Thank you.
Q: A. CALCULATE the amount, if any, of recapture of depreciation, ordinary loss or capital gain on the…
A: Gain or loss on disposal is incurred after the financial result of selling an asset. The calculation…
Q: Required Prepare Maple Ltd.'s journal entries to reflect the above assuming that: a. the hedge is a…
A: a. Cash Flow HedgeDateAccountDebit (CAD)Credit (CAD)Aug 31, 2020Derivative Asset/Liability00Apr 30,…
Q: Given the following information, determine the total average tax rate for a BC resident ear Tax…
A: Average rate of tax means on average what amount of tax has been paid on given amount of income.
Q: Required information nigner proportion of the production orders are now attributable to the Deluxe…
A: Activity based costing means where the product is valued on the basis of actual direct material,…
Q: On November 1, 2022, Zora Company had the following account balances. The company uses the perpetual…
A: Journal entry records the accounting transactions of a business in a journal book. All the business…
Q: Q2// Johnstown manufacturing company produces custom made, dyed sweat shirt for distribution on…
A: Journal entry records the accounting transactions of a business in a journal book. All the business…
Q: Helix Corporation uses the weighted-average method in its process costing system. It produces…
A: WEIGHTED AVERAGE METHOD :— Under this method, equivalent units are calculated by adding equivalent…
Q: On January 1, 2024, Whispering Winds Company sold property to Oriole Company which originally cost…
A: To calculate the interest income for 2024 using the effective-interest method, we'll need to…
Q: Smith, the lessee, signs an 8-year lease agreement of a floor of a building on December 31, 2020,…
A: A financial lease is a contractual arrangement where a lessee obtains the use of an asset for most…
Q: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
A: Budgeting is the process of creating a plan for how to spend and allocate financial resources. It is…
Q: Production and sales (units) Materials cost ($) Labour cost per unit ($) at $12 per hour Machine…
A: Activity-Based Costing (ABC) is a costing method that allocates indirect costs to products or…
Q: Loan Receivable Coundon Ltd, a key supplier of the Eldon plc group, experienced cash flow…
A: The above question asked is about impairment loss. impairment loss is the difference between the…
Q: Requirement 2. Prepare a flexible-budget-based variance analysis of the September performance.…
A: Variances is the amount of difference between the actual values and the values estimated by the…
Q: oseph works for Northwest Gaskets in Alberta. He earns $33,800.00 per year and is paid biweekly. His…
A: Income tax is based on income. Suppose a person has salary income, capital gain income, house rent…
Q: Part P40 is a part used in the production of dehumidifiers at Pollock Corporation. The following…
A: Operating Income: Operating income is the profit of the company which comes after deducting…
Q: Stark Company has five employees. Employees paid by the hour earn $12 per hour for the regular…
A: Journal entries are made to record the transactions as the first process in the books of accounts…
Q: The following post-closing trial balance was drawn from the accounts of Little Grocery Supplier…
A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…
Q: 93 94 95 96 97 C. Bad Debts Here is the information about the allowance for bad debts account for…
A: Bad debt expense is a charge against the income. It is recorded on the income statement to determine…
Q: FVA of $1, PVA of S1, FVAD of S1 and PVAD of S1) Required: Prepare the appropriate entries for Winn…
A: An operating lease is a rental agreement where the lessee uses an asset for a specific period,…
Q: vices have very fast access and large storage capacity. oney is trying to determine a production…
A: Manufacturing Cost -The costs associated with acquiring ingredients and turning them into finished…
Q: 2 t Het Mason Company provided the following data for this year: Sales Direct labor cost Raw…
A: Cost of goods manufactured -The cost of Goods Manufactured is the total cost incurred for…
Q: Carol is a salesperson paid solely by commission and is paid monthly. In September, Carol earned a…
A: The standard deductions which the employer of the company deducts from the gross pay of an employee…
Q: The following is a partially completed departmental expense allocation spreadsheet for Brickland. It…
A: COST ALLOCATIONWhen items of cost are identifiable directly with some products or departments such…
Q: Petrini Corporation makes one product and it provided the following information to help prepare the…
A: Budgeting -Based on current internal and external circumstances, budgeting estimates expected income…
Q: 2-a. Calculate the dividend yield for American Eagle and Buckle for the year ended February 3, 2018.…
A: Since the balance sheet is not provided, we solved this question by assuming the amount of dividend…
Q: Problem 7-4A (Algo) Accounts receivable transactions and bad debts adjustments LO C1, P2, P3 Liang…
A: The question is based on the concept of Financial Accounting.A form of account receivable known as a…
Q: ! Required information [The following information applies to the questions displayed below.]…
A: First-in First-Out Method - Under the First-in First-Out Method company uses inventory in the…
Q: Roberto Designers was organized on January 1, 2021. The firm was authorized to issue 150,000 shares…
A: Stockholder Equity Statement-A financial report that is included in the financial statements that…
Q: P23-1A Rogen Corporation manufactures a single product. The standard cost per unit of product is…
A: Variance - The discrepancy between real and standard expenses is known as variance in accounting.…
Q: The management of Knight Company has asked its accounting department to describe the effect upon the…
A: It is the stock held for sale to customers. The inventory comprises of raw materials, work in…
Q: Hi-Tek Manufacturing, Incorporated, makes two types of industrial component parts-the B300 and the…
A: Company may implement traditional costing or activity-based costing methods to determine the product…
Q: Accounting: type question:, If the current ratio of a company is 2 : 1, which of the following…
A: The current ratio shows the short-term liquidity of a company. It shows the ability of the company…
Q: Problem 14-13 (Static) [LO 14-3, 14-4, 14-5] Cole, an unmarried individual with no dependents, has…
A: Adjusted gross income:Adjusted gross income refers to the income that is determined after adjusting…
Q: Exercise 3-3 (Algo) Schedules of Cost of Goods Manufactured and Cost of Goods Sold [LO3-3] Primare…
A: Cost of goods manufactured -Cost of Goods Manufactured is the total cost incurred for manufactured…
Q: 1. Calculate the net cash settlement at March 31, June 30, and September 30, 2024. 2. Prepare the…
A:
Q: d. Pass journal entries in the books of Green Ltd.
A: Equity shares are those shares which do not have preferential right on dividend and repayment of…
Q: 1 & 2. Prepare journal entries for each of the above transactions and additional year-end adjusting…
A: Journal entries record financial transactions by debiting one account and crediting another,…
Q: Which 2 of these statements are true about excluded bank transactions in the bank feed?
A: There are various reasons why a transaction might need to be excluded in bank feeds.
Q: Advise the directors of Shildon plc on the accounting treatment of the SARS in the year ended 30…
A: Share Appreciation Rights (SARs) is a form of incentive compensation granted to employees. SARs are…
Q: For each procedure, indicate the primary audit objective being satisfied: Trace entries from cash…
A: The primary objective of an audit is to check and confirm that all financial information is…
Q: Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2024. The provisions…
A: Return on investment helps in measuring the performance by evaluating the profit and efficiency of…
Q: Problem 7-62 (LO 7-4) (Algo) Anwer owns a rental home and is involved in maintaining it and…
A: Passive income is the income in which you are not materially involved or in other words passive…
Q: Required information [The following information applies to the questions displayed below.] Diego…
A: The income statement is prepared to record the revenue and expense of the current period. It tells…
Q: Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending…
A: The cost retail ratio is used to estimate the inventory at cost price. The cost retail ratio is…
Q: Prepare the journal entry to record the redemption by 9,600 customers. (Credit account titles are…
A: Journal entry is used to record the financial transactions in the book of accounts in two different…
Q: 3. Donated Assets Brandon's Animal Rescue purchased a green energy system for their animal…
A: Journal entries are records of business transactions of the business with the help of the…
Q: What factors determine whether a pension plan is adequately capitalized or excessively capitalized?
A: A pension plan functions as a savings system for the retirement. If individual is employed, both…
Q: O O O 49% 44% 39%
A: Lets understand the basics.Mark up is added on the unit cost to obtain certain amount of profit.…
Q: Pureform, Incorporated, uses the FIFO method in its process costing system. It manufactures a…
A: Equivalent Unit:The equivalent unit concept is defined as the number of units that will be produced…
Q: July 1, 2025 Nov. 1, 2025 Dec. 31, 2025 Feb. 1, 2026 Apr. 1, 2026 Borrows $58,950 from First…
A: A journal entry serves as a documentation of a business transaction in the accounting records. In…
Step by step
Solved in 4 steps with 1 images
- Mustafa's portfolio consists of an annuity with monthly payments of $1,000 each month for five years and a $20,000 8% eight-year par-value bond bearing semiannual coupons. Calculate the Macaulay duration of the portfolio at 9%. Show ALL the work with formulas and explanations, should NOT use Microsoft Excel Sheet. Thank you.Consider the following hypothetical investment for the fund. Issue a one-month liability and purchase a $1,000, 15-year, 5% coupon Treasury bond. Assume that the one-month interest rate is currently 2% and that the 15-year interest rate is currently 5%. How much in liabilities would the fund have to issue to finance the purchase of the Treasury bond? At the end of one year the fund has received the coupon-interest payment on the bond and paid interest on its short-term liabilities. What is the net earnings for the fund for that year? What is the value of the bond investment at the end of the year (there are 14 years to maturity remaining on the bond) assuming that the long-term rate is still 5%? What is the net asset value (market value of assets minus liabilities) of the fund?Lassy provided you with the following information in the table below. find the value of the bond to assist him with his investment decision. Cash flow end of year amount appropriate return 1 through 5 1500 12% 6 8500
- You manage a pension fund that will provide retired workers with lifetime annuities. You determine that the payouts of the fund are going to closely resemble level perpetuities of $1.4 million per year. The interest rate is 8%. You plan to fully fund the obligation using 5-year and 20-year maturity zero-coupon bonds.Required: a. How much market value of each of the zeros will be necessary to fund the plan if you desire an immunized position?You manage a pension fund that will provide retired workers with lifetime annuities. You determine that the payouts of the fund are going to closely resemble level perpetuities of $2.3 million per year. The interest rate is 10%. You plan to fully fund the obligation using 5-year and 20-year maturity zero-coupon bonds. Required: a. How much market value of each of the zeros will be necessary to fund the plan if you desire an immunized position?. Five-year Twenty-year Market Value Five-year Twenty-year million million b. What must be the face value of each of the two zeros to fund the plan? Face Value million millionYou manage a pension fund that will provide retired workers with lifetime annuities. You determine that the payouts of the fund are going to closely resemble level perpetuities of $2.3 million per year. The interest rate is 10%. You plan to fully fund the obligation using 5-year and 20-year maturity zero-coupon bonds. Required: a. How much market value of each of the zeros will be necessary to fund the plan if you desire an immunized position? (Do not round intermediate calculations. Enter your answers in millions. Round your answers to 1 decimal place.) Five-year Twenty-year Market Value million million b. What must be the face value of each of the two zeros to fund the plan? (Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places.) Five-year Twenty-year Face Value million million
- You manage a pension fund that will provide retired workers with lifetime annuities. You determine that the payouts of the fund are going to closely resemble level perpetuities of $1.8 million per year. The interest rate is 10%. You plan to fully fund the obligation using 5-year and 20-year maturity zero-coupon bonds.Required: a. How much market value of each of the zeros will be necessary to fund the plan if you desire an immunized position? (Do not round intermediate calculations. Enter your answers in millions. Round your answers to 1 decimal place.) Market Value Five-Year ___ Million Twenty-Five Year ___ Million b. What must be the face value of each of the two zeros to fund the plan? (Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places.) Face Value Five-Year ___ Million Twenty-Five Year ___ MillionYou manage a pension fund that will provide retired workers with lifetime annuities. You determine that the payouts of the fund are going to closely resemble level perpetuities of $2.0 million per year. The interest rate is 10%. You plan to fully fund the obligation using 5-year and 20-year maturity zero-coupon bonds. Required: a. How much market value of each of the zeros will be necessary to fund the plan if you desire an immunized position? (Do not round intermediate calculations. Enter your answers in millions. Round your answers to 1 decimal place.) Five-year Twenty-year Market Value Five-year Twenty-year million million b. What must be the face value of each of the two zeros to fund the plan? (Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places.) Face Value million millionAnswer the following question and show all working using a financial calculator. DO NOT use excel: a.The face value for WICB Limited bonds is $250,000 and has a 6 percent annual coupon. The 6 percent annual coupon bonds matures in 2035, and it is now 2020. Interest on these bonds is paid annually on December 31 of each year, and new annual coupon bonds with similar risk and maturity are currently yielding 10 percent. How much should Karen sell her bonds today?
- You manage a pension fund that will provide retired workers with lifetime annuities. You determine that the payouts of the fund are going to closely resemble level perpetuities of $2.1 million per year. The interest rate is 10%. You plan to fully fund the obligation using 5-year and 20-year maturity zero-coupon bonds.Required: a. How much market value of each of the zeros will be necessary to fund the plan if you desire an immunized position? (Do not round intermediate calculations. Enter your answers in millions. Round your answers to 1 decimal place.) Market Value Five year: Twenty year: b. What must be the face value of each of the two zeros to fund the plan? (Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places.) Face Value Five year: Twenty year:You are going to invest in a stock mutual fund with a front-end load of 6 percent and an expense ratio of 1.39 percent. You also can invest in a money market mutual fund with a return of 2.6 percent and an expense ratio of 0.10 percent. If you plan to keep your investment for 2 years, what annual return must the stock mutual fund earn to exceed an investment in the money market fund? What if your investment horizon is 9 years? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. 2 Years 9 Years Annual Return % %You manage a pension fund that will provide retired workers with lifetime annuities. You expect a large number of workers to retire in 8 years. You have the following two bonds to invest in and immunize this portfolio. Inputs Bond A Bond B Settlement date 01-01-2020 01-01-2020 Maturity date 01-01-2025 01-01-2040 Coupon rate 0.025 0.0000 Face Value $1,000.00 $1,000.00 Coupons per year 1 1 Obligation Time to Payout 8 Payout $50,000,000 Initial Yield to Maturity 0.0750 Required: Using any necessary data above, calculate the Present value and Macaulay Duration of the obligation. Assume annual payments. Then calculate the Macaulay Duration and the Modified Duration for each bond. Use this information to immunize the portfolio. Then, re-immunize the portfolio 1 year later using the new yield.