What is the approximate yield to maturity of a 10% coupon rate, $1,000 par value bond that is currently priced at $1,250, with 10 years to maturity?

Q: How is the revaluation surplus handled under the revaluation model?

A: The question is related to Revaluation model under IAS16 Property, Plant and Equipment. Under this…

Q: What does the volatility value represents?

A: Volatility for a given product or market index is a factual proportion of the scattering of profits.…

Q: Compare and contrast dollar returns and rates of return.

A: The returns from any investment can be calculated in terms of value (amount terms) or percentages.

Q: How can we find Yield to maturity?

A: Yield to maturity (YTM) is the foreseen absolute profit for a bond if the bond holds until due or…

Q: How do you calculate inflation premium

A: Inflation refers to the sustained increase in the general level of prices of goods and services in…

Q: Explain the effect of issuance cost on firm value.

A: There are issues cost associated with debt and equity that has impact on  value of firm.

Q: what is portfolio load

A: Introduction : In simple words, when an individual or an entity purchase and collect different kinds…

Q: Example or scenario of market portfolio?

A: The question is based on the concept of market portfolio, which  is a bundle of  all the assets…

Q: What is maturity matching approach (for short-term financing)?

A: This approach states that the maturity of company’s assets and liabilities should be coordinated to…

Q: How do maturity risk premiums affect the yield curve?

A: A premium, which a borrower pays to the lender in the form of compensation of interest rate…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: What is Long-Term Equity AnticiPation Security (LEAPS)?

A: Long-term equity anticipation securities (LEAPS) It's a contract for trading on open market options…

Q: What is financial market equilibrium? And then explain its relation to required rate of return.

A: Financial market equilibrium: Financial market equilibrium is a condition in which money supply…

Q: An environmental engineer is considering three methods for disposing of a non-hazardous chemical…

A: There are 3 methods for disposing of the non-hazardous chemical sludge. Least cost of the project is…

Q: What does the annual effective yield represent?

A: Yield refers to the rate of return that is received by the owner of the security who has invested in…

Q: Explain APY (annual percentage yield)?

A: APY (Annual Percentage Yield):   It is the real return rate that is earned on an investment during a…

Q: The discount rate is the combination of what two types of discounting?   a. exponential and linear…

A: Discount rates are used for discounting the future cash flows. It helps in determining the time…

Q: What is market value ratios?

A: Introduction: Market value ratios help to assess the economic position of publicly dealt…

Q: What is the Fixed Charge Coverage Ratio? • What is the Earnings Yield Ratio?

A:

Q: The formula of which of the following considers the percentage change in price? a. Total expected…

A: Percentage change in price Percentage change in price involves two prices of two different periods.…

Q: What is the relationship between the price, coupon rate  and market yield?

A: The coupon rate is the bond's interest rate. The coupon rate is not the same as the market interest…

Q: Make a contrast between yield to maturity (YTM) and yield to redemption (YTC).

A: Contrast between Yield to maturity (YTM) and yield to redemption (YTC):

Q: impacts  of inflation on money investment

A: Inflation occurs when prices across a sector or an industry increases, thereby decreasing the…

Q: Explain the Leverage and the Incremental Cost of Debt with example?

A: Leverage – Leverage is a financial term it means using the debt for their financial needs and…

Q: Define yield to maturity (YTM)

A: Bond is a financial instrument. Issuer issues bond to raise the fund and payback the amount at the…

Q: Why inflation is considered and have effect in present value?

A: Inflation is the increase in the general price level of the country. It is an important indicator of…

Q: Define cost of equity? How does it relate to the ‘required rate of return’ (r) on equities?

A: Definition of Cost Equity: Cost of equity is the return that a company requires for an investment or…

Q: Isn't the maturity value/principal is what we are looking for? F = Pr/(1-DT)?

A: Discount depends on the policy of the bank.

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.