User Account

All Pages

Shortening the term of the debt

Assignment Help Business Management
Reference no: EM132283766

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: EM132283766

Questions Cloud

Compare the benefits of growing gm seeds : Compare the benefits of growing GM seeds for crops with the potential negative consequences of using them?
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
What limitations are present when implementing cryptography : Describe a situation when it might be ideal to define security requirements to align with a wicked environment. What limitations or constraints are present.
Firm producing the profit-maximizing level : Is the firm producing the profit-maximizing level of output? Why or why not? If not, what should the firm do?
Shortening the term of the debt : 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.
How does this strength affect the operations of organization : How does knowledge of this weakness assist the organization in meeting the needs of its target market(s)?
Increase in money supply per person : Suppose the fed wants to reduce the interest rate to 2%. How much of an increase in money supply per person is necessary to do so?
What other affect has it had on society as a whole : Describe the actions of people and organizational leaders directly and indirectly involved with the tragedy. Specifically, address the ethical issues they faced
Compare the services in terms of competitive advantage : Identify at least two companies that outsource their services. Compare and contrast their services in terms of competitive advantage. Evaluate which one.

Reviews

Write a Review

Business Management Questions & Answers

  Weight of detergent in packets filled

An inspector wants to estimate the weight of detergent in packets filled, by an automatic filling machine. She wants to be 95% confident that her estimate is not away from the true mean weight of detergent by more than 10 gms.

  Average order cycle is always the most important

"When comparing order cycles, the average order cycle is always the most important" Do you agree with statement? Explain briefly.

  How might your preference for various benefits

How might your preference for various benefits change as you grow older or as your family situation changes?

  Five pitfalls and sand traps in fund-raising

List and describe two of the five pitfalls and sand traps in fund-raising and why do entrepreneurs sometimes fail to avoid them?

  My definition of success

Go to Google.com and key in "my definition of success" and "cultural differences." Read through the links and find five different personal definitions of succes

  Meeting performance expectations

One of your customer service and sales representatives is consistently not meeting performance expectations. You have decided to terminate the representative.

  Study on customer satisfaction in commercial bank

A study on Customer Satisfaction in commercial Bank - Explain your research philosophy, approach and strategy. In comment on what make your research positive

  What are the problems and threats about the businesses

Should Paras TMT, Sarvottam Rolling Mills (P) Ltd invest in a new furnace - What are the problems and threats about the businesses

  Advantages and disadvantages of using kirkpatrick taxonomy

This week's lecture describes the advantages and disadvantages of using Kirkpatrick's taxonomy. As an HR employee tasked with creating and evaluating a training course for your organization, how would you use Kirkpatrick's taxonomy to evaluate the..

  Consumer consumes only two goods

Suppose that a consumer consumes only two goods, good x and good y. Assume that (q=20, I=50) and (q'=23, I'=60) are two points on the consumer's Engle curve.

  Professional liability risks related to cloud computing

Review the assigned article, "Professional Liability Risks Related to Cloud Computing" (http://www.cpai.com/business-insurance/professional-liability/ProfessionalLiabilityRisks) Respond to the following in reference to the above listed article.

  It features a large choice of materials for flooring

The Don's Lumber Company on the Hudson River is one of the oldest retail lumber yards in New York State. It features a large choice of materials for flooring, decks, mouldings, windows, siding and roofing

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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