Assume that several years from now yield to maturity on

Reference no: EM13395309

Suppose that several years from now the yield to maturity on 2-year treasury note was 4.85% while the yield on a 1 year note was 5.2%.Assume that neither treasury note had coupon payments, so the y payment the face value received when the note matured.

a)Why is it unusual for yields on longer term notes to be lower than yields on shorter term notes?

b)what expectations would lead a risk neutral investor to buy the 2 year note (instead of the 1 year ) given its lower yield? include your calculations.

Reference no: EM13395309

Questions Cloud

Prepare a two to three page paper following the apa : prepare a two to three page paper following the apa guidelines detailing the respective duties of people critical to

Why is there a mandatory duty to bargain in : 1. why is there a mandatory duty to bargain in labor-management negotiations when such a duty does not exist elsewhere

That analyzes a legalethical issue or situation relating to : that analyzes a legalethical issue or situation relating to a current previous or potential future work environment.

Why is there a mandatory duty to bargain in : 1. why is there a mandatory duty to bargain in labor-management negotiations when such a duty does not exist elsewhere

Assume that several years from now yield to maturity on : suppose that several years from now the yield to maturity on 2-year treasury note was 4.85 while the yield on a 1 year

A small canadian company in pharmaceuticals has developed a : a small canadian company in pharmaceuticals has developed a new drug and is considering selling it to the european

What to expect to happen to price of byhys bonds and why : assume that the bonds of highly byhy corporation currently have a yield to maturity of 8 and are due in 1 year.

Give an example code for an anonymous inner class discuss : provide an example code for an anonymous inner class. highlight what makes your example inner anonymous and

Describe the process of rolling out this new company-wide : describe the process of rolling out this new company-wide quality initiative. pay specific attention to the logistics

User Account

All Pages