Reference no: EM13231821
1. Consider the following four debt securities, which are identical in every characteristic except as noted:
W: A corporate bond rated AAA
X: A corporate bond rate BBB
Y: A corporate bond rated AAA with a shorter time to maturity than bonds W and X
Z: A corporate bond rated AAA with the same time to maturity as bond Y that trades in a more liquid market than bonds W, X, or Y.
List the bonds in the most likely order of the interest rates (yields to maturity) of the bonds from highest to lowest. Explain your work.
2. Explain how an economist could use the slope of the yield curve to analyze the probability that a recession will occur and why the spread may matter.
3. One year ago, you bought a bond for $10,000. You received interest of $400 at the end of the year, as well as your $10,000 principal. If the inflation rate over the last year was five percent, calculate the real return.
4. Suppose that the price of a stock is $50 at the beginning of a year and $53 at the end of the year, and it pays a dividend of $2 during the year. Calculate the stock's current yield, capital-gains yield, and the return.
5. Use the capital-asset pricing model to predict the returns next year of the following stocks, if you expect the return to holding stocks to be 12 percent on average, and the interest rate on three-month T-bills will be two percent. Calculate a stock with a beta of -0.3, 0.7, and 1.6.
|
One of the most basic problems with capitalism
: One of the most basic problems with capitalism, according to Marx, was:
|
|
Describe the neuromuscular junction blocking
: How do depolarizing neuromuscular junction blocking agents work, What are the key adverse effects of neuromuscular junctionblocking agents
|
|
What is the average number of customers in the system
: what is the average number of customers in the system? which Answer is it 0.50 4.00 2.25 3.00 none of the above.
|
|
Define what is the coordination number of m in the complex
: When MCl4(NH3)2 is dissolved in water and treated with AgNO3, 2 moles of AgCl precipitate immediately for each mole of MCl4(NH3)2. Whats the coordination number of M in the complex?
|
|
Explain how an economist could use slope of yield curve
: Suppose that the price of a stock is $50 at the beginning of a year and $53 at the end of the year, and it pays a dividend of $2 during the year. Calculate the stock's current yield, capital-gains yield, and the return.
|
|
What is the minimum distance that connects all the nodes
: Given the following distances between destination nodes, what is the minimum distance that connects all the nodes? From To Distance 1 2 100 1 3 50 2 3 200 2 5 300 1 4 50 3 4 350 3 5 400 3 6 400 4 5 450 4 6 350 5 6 200 What Answer 900 1200 1100 700..
|
|
Explain solution of barium flouride contains
: suppose a saturated solution of Barium Flouride contains 1.47*10^-2 M F-. What is the Ksp of the BaF2?
|
|
Healthcare articles examination
: Describe the three most important aspects (concepts, issues, factual information, etc) of the reading and justify these choices and identify two or more aspects of the reading you don't understand and briefly discuss why these confusing aspects int..
|
|
What is the coefficient of determination
: (a) Develop a scatter diagram. (b) What is the correlation coefficient? (c) What is the coefficient of determination?
|