You want to buy an apartment priced at $300,000. You have saved a deposit of $30,000. The bank has agreed to lend you the $270,000 as a fully amortising loan with a term of 25 years. The interest rate is 12% pa and is not expected to change.
What will be your monthly payments? Remember that mortgage loan payments are paid in arrears (at the end of the month).
The theory of fixed interest bond pricing is an application of the theory of Net Present Value (NPV). Also, a 'fairly priced' asset is not over- or under-priced. Buying or selling a fairly priced asset has an NPV of zero.
Considering this, which of the following statements is NOT correct?
An investor bought two fixed-coupon bonds issued by the same company, a zero-coupon bond and a 7% pa semi-annual coupon bond. Both bonds have a face value of $1,000, mature in 10 years, and had a yield at the time of purchase of 8% pa.
A few years later, yields fell to 6% pa. Which of the following statements is correct? Note that a capital gain is an increase in price.
During the COVID lockdown recession of 2020, central banks around the world cut interest rates so low that they were practically zero. In some countries, government bond yields are also very close to zero.
Find the price of a three year government bond with a face value of $100 and a coupon rate of 2% pa paid semi-annually, issued at a yield of 0%. What is the price of the bond?
A firm has a debt-to-equity ratio of 60%. What is its debt-to-assets ratio?
What is the correlation of a variable X with a constant C?
The corr(X, C) or ##\rho_{X,C}## equals: