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1)If the risk-free rate is 6.25%, the inflation premium is 2% and the liquidity premium is 0.5%, the long-term Treasury bond rate should be:A. 6.75%B. 7.75%C. 8.25%D. 8.75%E. None of the above2)A 20 year U.S. Government bond with a 10-percent annual coupon rate sells at $1,000 (par value) when prevailing interest rates on comparable securities are 10 percent. When interest rates on comparable securities drop to 8 percent this bond has a price of $1,197.90. On the other hand, when comparable rates rise to 12 percent the bond's price falls to $849.50. The price elasticity of this bond, when rates move downward from the coupon rate, must be (to the nearest thousandth place):A. -0.990B. -0.779C. -0.550D. -0.880E. None of the above3)A home mortgage loan for $80,000 is available from the neighboring bank at an interest rate of one percent per month. The loan will mature in 25 years. Approximately what payment must the borrower make each month under the terms of this loan agreement?A. $692B. $729C. $843D. $950E. None of the above4)A stock purchased one year ago today at $10 per share is sold today at $15 per share. It has paid a dividend this year of $3. The investor's before-tax holding-period yield must be:A. 12 percentB. 20 percentC. 40 percentD. 60 percentE. 80 percent5)Suppose a $1,000 par-value bond was issued last year with a promised annual rate of return (yield) of 6 percent when market interest rates on comparable securities were also 6 percent. Thus, the bond pays its holder $60 annually in interest. Today, one year later, market interest rates on comparable securities are 10 percent. The price of the 6 percent bond will approach what dollar figure?A. $1,060B. $940C. $750D. $600E. $5006)Suppose the GDP deflator index has a base period of 100 in 1990 and by the year 2001 the deflator had an index value of 135. What was the percentage change in the purchasing power of this nation's currency?A. Increased by 35 percentB. Decreased by 26 percentC. Increased by 135 percentD. Decreased by 74 percentE. None of the above
XYZ Corporation issued $500 million in debentures in 2002 at par. The debentures carry a coupon rate of 3.5% and mature on 12/15/2020.
Describing what is likely to happen to interest rates, deposits, and total bank reserves and What special status is awarded to the president of the Federal Reserve Bank of New York (FRBNY) in the determination of U.S. monetary policy?
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Computation the present value of the portfolio of investments and what is the present value of her inheritance
What amount is needed to be invested today at 6% Per annum, compounded semiannually, to equal $17,000 10 years from now? What amount is needed to be invested for the 2 1/2 years at 8% per annum, compounded quarterly to equal $5,000?
Jean will receive $8,500 per year for the next 15 years from her trust. Explain how you resolved this problem, including which table (for example, present value and future value) was employed and why.
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Suppose that the Financial Management Corporation's $1,000-par-value bond had a 5.700% coupon, matured on May 15, 2017, had a current price quote of 97.708, and had a yield to maturity (YTM) of 6.034%.
Find out the interest rate for Warren when $2,500 is returned one year later. Find out the rate if $2,500 will be returned in five years?
Measure, model, and forecast the volatility of bond returns in Canada, Determine the optimal hedge ratio for a spot position in cattle or oil markets
Discuss why an employer should adopt a defined-benefit plan to account for past service.
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