Paying a rate of return

Assignment Help Business Management
Reference no: EM132284311

One year bonds are paying a rate of return of 2%, while two year bonds are paying a rate of 4%. The US government issues 2-year bonds to borrow. The US treasury secretary decides to save money by shortening the term of the debt, issuing two one year bonds in succession rather than a two-year bond. Interest payment each year will be lower by (.04-.02)*D where D is the level of debt. If pure expectations theory is correct will the secretaries plan work?

Reference no: EM132284311

Questions Cloud

Challenges faced in the criminal justice system : Expand your understanding of the challenges faced in the criminal justice system when ethical decision-making and group mentality occur simultaneously
Cramer rule to solve for the equilibrium values : Use the Cramer's rule to solve for the equilibrium values of x1,x2 and x3 in the system of equations
Describe the standard use of the personality assessment : In your initial post, examine the personality assessment instrument used in the scenario and research a peer-reviewed article in the Ashford University.
Producing the profit-maximizing level of output : Is the firm producing the profit-maximizing level of output? Why or why not? If not, what should the firm do?
Paying a rate of return : One year bonds are paying a rate of return of 2%, while two year bonds are paying a rate of 4%. The US government issues 2-year bonds to borrow.
Equilibrium nominal interest rate : What is the equilibrium nominal interest rate? Suppose the fed wants to reduce the interest rate to 2%.
Management plan for existing petroleum engineering project : Prepare a management plan for an existing petroleum engineering project paper. Provide an overall management plan for the project
Explain how regional trading groups influence organizations : Identify factors of production, and describe how their mobility is good or bad for U.S. trade - Distinguish between absolute advantage and comparative
What are western europe tariff and trade barriers : What are Western Europe tariff and trade barriers

Reviews

Write a Review

Business Management Questions & Answers

  Appropriate price for the product

A manager wants to calculate the price of a product produced by the firm she works for. Recent calculations show that the elasticity value of the product.

  What are the major factors in crisis leadership

Describe some key models of training. Which do you think is most effective?

  Symptoms an organization needs change

Determine the symptoms that a manager should look for in determining whether an organization requires to change? Provide examples.

  Similarities and dissimilarities of distribution for service

Identify the special problems and opportunities associated with distribution in service organizations. -Discuss the similarities and dissimilarities of distribution for services and for goods.

  Appropriate annual rate of return for stream

You believe that the appropriate annual rate of return for this stream of CFs should be 8%. Which option do you choose and why?

  Outline features of an ideal health care policy

Outline features of an ideal health care policy. Keep in mind that, despite your wisdom and noble intentions, resources are limited. What are several of the policy items you want to focus on immediately?

  How can bss see that its background testing programs

What sort of background testing must BSS conduct on its applicants,  Is there any information BSS must avoid obtaining for legal or EEO reasons, How can BSS see that its background testing programs are effective?

  Show the value of ratio analysis in decision making for

show the value of ratio analysis in decision making for heath care organizations.o include at least two ratios from

  Different forms of business organizations

List and explain the different forms of business organizations. Provide a detailed explanation on what decision, and why

  List of positive numbers entered by the user

We have to put together a raptor flowchart that will find and display the largest of a list of positive numbers entered by the user.

  Examples of organizations that are currently dealing

Conduct a web search seeking two examples of organizations that are currently dealing with ethical issues.

  Protocols necessary for network communications

Although this suite is commonly known as TCP/IP, these are only two of the many protocols necessary for network communications.

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