Expectations theory-yield using a geometric average

Assignment Help Financial Management

Reference no: EM131492578

Expectations Theory

Interest rates on 4-year Treasury securities are currently 5.55%, while 6-year Treasury securities yield 7.65%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places.

Reference no: EM131492578

Questions Cloud

Which time it will stop paying dividends permanently : The company announced today that it will continue to pay this constant dividend for the next 3 years after which time it will stop paying dividends permanently.

Purchased all new equipment which will be depreciated : The only difference between Joe's and Moe's is that Moe's has old, fully depreciated equipment. Joe's just purchased all new equipment which will be depreciated

The euro and us dollar exchange rate : The euro/US dollar exchange rate is $1.6/€ while the Canadian dollar/US dollar exchange rate is C$1.25/$.

What is covariance of these two securities : Stock A is expected to return 14 percent in a normal economy and lose 21 percent in a recession. What is the covariance of these two securities?

Expectations theory-yield using a geometric average : what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average.

What would the quarterly payment in first year have to be : Assume you will be borrowing $250,000 for a home at 6% nominal annual interest, compounded quarterly. what would quarterly payment in the first year have to be.

Out details of an important business contract : Number 1- Bud has his agent, Brody, meet with Joey to work out details of an important business contract.

What is the standard deviation of the returns : What is the standard deviation of the returns?

Payment annuity-immediate with monthly payments : Find the unknown amount X if the first payment is X and each subsequent payment is 50 more than the previous one.

User Account

All Pages