A company enters into a FRA to receive a fixed 7% pa rate, annual compounding, for $1 million principal between end of year one and end of year two. The one-year zero rate is 3.0% pa and the two-year zero rate is 4% pa. Calculate the value of the FRA to the company at the beginning of year 1? O a. $17,289 O b. $17,995 O c. $18,730 o d. $20,000

A company enters into a FRA to receive a fixed 7% pa rate, annual compounding, for $1 million principal between end of year one and end of year two. The one-year zero rate is 3.0% pa and the two-year zero rate is 4% pa. Calculate the value of the FRA to the company at the beginning of year 1? O a. $17,289 O b. $17,995 O c. $18,730 o d. $20,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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2. C-type Company receives $ 400,000 when it issues 6% mortgage note payable for 4 years to finance the construction of a building at December 31, 2020. The term provides for semiannual installment payment of 34,000 (including real estate tax and insurance $1900) on June 30 and December 31. Instructions: i. Prepare an installment payments schedule for the first 4 years. Prepare entries for the mortgage loan and first installment payment. Show the Balance sheet representation at December 31, 2020. ii. iii.
Find the amount to which $500 will grow under each of the following conditions applying the F rule. 12% compounded annually for 5 years 12% compounded semiannually for 5 years 12% compounded quarterly for 5 years 12% compounded monthly for 5 years
A Php 111,205 was loaned at an interest rate of 0.06. 7 annual payments has to be settled, the first payment will start at the end of 3rd year. Compute for the principal amount remaining at the start of 6th year.
Answer parts d and e
21. A promissory note which is dated January 1, 20A was received from a client for service rendered by the ML Company for P350,000. Its term is 1 year (360 days) and carries with it a 10% interest rate. On the same date, due to financial needs, the company immediately have it discounted to a financial provider at 15% discount. Compute the amount of loss if the discounting arrangement is a conditional sale. Round off final answer to the nearest peso.
From the following list indicate which of the liabilities that would be classified as current. O a. Deferred revenue on a project that will be completed in 6 months O b. Bank loan payable in 2 years O c. Deferred income taxes O d. Pension liability Oe. The portion of a 10-year bank loan that is due this year O f. Payroll deductions owing to the government Og. A provision for warranty repairs related to a product with a 1-year warranty ype here to search eTextbook and Media 8:
Culver Company loans Sheffield Company $1,870,000 at 7% for 3 years on January 1, 2025. Culver intends to hold this loan to maturity and has the financial ability to do so. The fair value of the loan at the end of each reporting period is as follows. December 31, 2025 December 31, 2026 December 31, 2027 No. Prepare the journal entries at December 31, 2025, and December 31, 2027, for Culver related to these bonds, assuming (a) it does not use the fair value option, and (b) it uses the fair value option. Interest is paid on January 1. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) (a) No. (b) Date $1,924,000 1,892,000 Date 1,870,000 Account Titles and Explanation Account Titles and Explanation (To record interest revenue) Debit Debit II…
A series of equal semi-annual payments of $1,000 for 3 years is equivalent to what present amount at an interest rate of 12% compounded annually A $4,944 B) $2,402 $4,804 $4,111
Compute for the effective interest rate. Payment period = semi-annual Interest period = 25.1% compounded semi-annual Note: Final answer should be in decimal form. Round your answer in 4 decimal places. (Ex. 0.0304; 0.1251)
A bonus package pays an employee s1000 at the end of the first semi-annual, $1500 at the end of the second semiannual, and so on, for the first nine years of employment. What is the present worth of the bonus package at 6% per year compounded monthly A s28,233 B) s66,480 $19,090 $47,665
ASAP
Find the present value of $1,000 to be received at the end of 4 years at 12% compounded semi-annually. $627 $637 $675 $622

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