Corporate bond yields rise while treasury bond yields fell

Assignment Help Microeconomics
Reference no: EM13687017

The US treasury isn't the only issue of bonds. Corporations also issue bonds that have future payment structures like U.S. Treasuries. Of course, unlike the federal government, corporations can go bankrupt, leaving their bondholders unable to collect all of their scheduled payments. Because of this risk of default, corporate bonds should have a higher yield in equilibrium than similarly structured Treasury bonds. Under what economy-wide economic conditions, if any, might you expect to see corporate bond yields rise while Treasury bond yields fell?

Reference no: EM13687017

Questions Cloud

What factors will cause a change in demand and supply : What factors (determinants) will cause a change in demand and what factors (determinants) can cause a change in supply? Can you give any current examples of a determinant of demand that you see changing in any industry or marketplace or a determinant..
Average annual rate of return on your investment : Presume you buy a share of stock for $20 and sell it for 40. Then your profit is $20. If that happens within a year, your rate of return is an impressive 100%. If it takes 6 years, what would be the average annual rate of return on your investment?
Cups size is independently drawn from the distribution : Presume the expected size of each cup of punch is 2 ounces and the standard deviation of the size of a cup is 1/2 ounce and each cup is poured independently. Presume each cup's size is independently drawn from the distribution. What is the approximat..
Consumer surplus at this competitive equilibrium : Market demand is p = 540 - q and the market supply equation is p = 60 + 2q. Use this data for the following questions. (The question is in bold bellow) The competitive equilibrium is:? Consumer surplus at this competitive equilibrium is:?
Corporate bond yields rise while treasury bond yields fell : The US treasury isn't the only issue of bonds. Corporations also issue bonds that have future payment structures like U.S. Treasuries. Of course, unlike the federal government, corporations can go bankrupt, leaving their bondholders unable to collect..
Compute the current yield and the coupon rate : Consider a $1,000.00 face value bond with a $40 annual coupon and 8 years until maturity. Compute the current yield and the coupon rate for each of the following: The bond is purchased for $850
Money market as institutions sell bonds to obtain more money : If the real money demand is greater than the real money supply interest rates must rise to reach equilibrium in the money market as institutions sell bonds to obtain more money.
Presume a treasury bill has a purchase price : Presume a Treasury bill has a purchase price of $9850; a face value of $10,000 and 99 days to maturity. Compute the yield to maturity. Answer as a percent and round to two decimal places
Evaluate purchases estimate the cost to purchase new piece : Remerowski Corporation Inc. asks you to estimate the cost to purchase a new piece of production equipment in the past for $10000 the original equipment had a capacity of 2,000 units, while the new equipment has a capacity of 1000 units.

Reviews

Write a Review

Microeconomics Questions & Answers

  The bp oil spill and mental health

What are the ethical issues in this case? Who are the stakeholders and how are they impacted by this situation? Do you agree with Feinberg’s assertion that “you have to draw the line somewhere?”

  1 consumers in queensland pay twice as much for avocados as

1. consumers in queensland pay twice as much for avocados as they do for peaches.however avocados and peaches are

  Does eve have a claim against alfred

Eve bought defective ball bearings from Saginaw Corp. Alfred was the sole shareholder of the company and also its landlord. After Alfred sold all Saginaw's assets, he withheld enough money to cover the rent that Saginaw owed him. As a result Sagin..

  How does a students income elasticity affect

Despite the empirical evidence to the contrary, college decision-makers often believe that their price elasticity of demand is essentially zero. Is that right How important were price considerations in making your college decision Would a change o..

  Using the intermediate macroeconomic

Using the intermediate macroeconomic

  List all the tradeoffs of that decision

Identify one decision that you made in the Preview (for example, to attend the football game). List all the tradeoffs of that decision. In your list, circle your opportunity cost of that decision. Then explain why this is your opportunity cost.

  The market failure of external cost

A copper mining operation discharges waste products into a river and causes higher costs and discomfort to downstream users of the water.

  Historically accompanied eras of global economic expansion

Historically accompanied eras of global economic expansion

  What should he charge for good

A price discriminating monopolist produces two products that exhibit the following price elasticities of demand and does anybody can have a dominant strategy? Explain.

  Exchange in an island economyrobin and terry are stranded

exchange in an island economy.robin and terry are stranded on a deserted island and consume two products coconut and

  Explain the effect on worldwide market for alcoholic

what was the effect on the worldwide market for alcoholic beverages of the eighteenth amendment to the u.s.

  Why the extent to which the goods should be taxed

one reason for government intervention in the economy is to discourage the consuption of goods which have negative externalities. Carefully explain why and the extent to which these goods should be taxed.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd