Dylan purchased 20 GIA Inc. bonds in 2008 when the yield to maturity was 12.5%. Because of falling interest rates she had to reinvest the coupon payments at 8%, 6%, 4% and finally, 3%
The internal rate of return on her investment will be
A) greater than the coupon rate but less than the original yield to maturity.
B) less than the original yield to maturity.
C) greater than the original yield to maturity.
D) the reinvestment rate has no effect on the internal rate of return.
Answer: B
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Risa, Inc has provided the following extracts from their budget for the first quarter of the forthcoming year
Jan Feb March Purchases on account $264,000 $295,000 $320,000 The vendors are allowed the following terms of payment: Month of purchase 30% First month after the purchase 35% Second month after the purchase 35% Calculate the total payment on account for the month of March. A) $168,275 B) $136,955 C) $320,000 D) $291,650
Unexpected events are a minor hurdle and are rarely considered while managing a large-scale systems development project
Indicate whether the statement is true or false