The interest rate on a two-year treasury security

Assignment Help Financial Management
Reference no: EM131044392

The interest rate on a two-year treasury security is 4.16%, and the interest rate on a one-year treasury security is 5.25%. What is the expected interest rate on a one-year treasury security one year from now? State you answer as a percentage to two decimal places.

Reference no: EM131044392

Questions Cloud

Write about surrogates super-replicators and future happines : Write a paper about Surrogates, Super-Replicators and Our Future Happiness.
Question regarding the company pollution prevention efforts : How important is corporate philosophy to a company's pollution prevention efforts? Please use an example of one or morecompanies to support your position.
Prepare a presentation about the sugar content : I requires a presentation about the sugar content and everything about sugar in the documentary. List only those references cited in the text. References are listed alphabetically by the first author's last name.
What important ethical disadvantage of deceiving participant : There is a tendency for debates about ethics in social research to focus on the most extreme cases of ethical transgression. Why might this create a misleading impression?
The interest rate on a two-year treasury security : The interest rate on a two-year treasury security is 4.16%, and the interest rate on a one-year treasury security is 5.25%. What is the expected interest rate on a one-year treasury security one year from now? State you answer as a percentage to two ..
Find the market value of the equity in the project : A large electronics company is considering making a $100M investment in a new product line. Assume that it will finance 60% of this investment with off-balance sheet financing at a debt cost of 5% (beta of debt is 0.3). The project is expected to gen..
What is the value of endowment in todays dollars : A wealthy philanthropist has established the following endowment for a hospital. The details are as follows: a cash deposit of $ 12 M two years from now; an annual cash deposit of $4M per year for the next five years. The first $4M will start today; ..
Constant-growth rate-what is the current price of the stock : Grant, Inc., is a fast growth stock and expects to grow at a rate of 25 percent for the next four years. It will then settle to a constant-growth rate of 10 percent. The first dividend will be paid out in year 3 and will be equal to $5.00. If the req..
About the retirement fund each year : Assume Mr. Prudent pays $2,500 into his retirement fund each year from age 35 to age 65. After age 65, Mr. P will withdraw a fixed amount each year for 20 years until he is 85 years old. Assume his investments will earn 5% for the next 30 years, and ..

Reviews

Write a Review

Financial Management Questions & Answers

  About the compute present value

Compute the present value of a $2,500 deposit in year 4 and another $10,000 deposit at the end of year 8 if interest rates are 15 percent.

  Considered to be the most risky

Which of the following is considered to be the most risky?

  What is the present value of the second option

You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $8,300 per month for the next three years, or you can have $7,000 per month for the next three years, alon..

  What is proper cash flow amount to use initial investment

Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $5.2 million in anticipation of using it as a warehouse and distribution site, but the comp..

  Industries will pay a regular dividend

JJ Industries will pay a regular dividend of $0.75 per share for each of the next four years. At the end of four years, the company will also pay out a liquidating dividend. If the discount rate is 12 percent, and the current share price is $75, what..

  How do they earn their return on equitywhen we discussed

how do they earn their return on equity?when we discussed dupont analysis and corporate strategy we noted that return

  Regarding financial distress and bankruptcy

Which of the following statements are correct regarding financial distress and bankruptcy? When the firm liquidates its assets in bankruptcy, bondholders have priority over employees who are owed wages. The absolute priority rule determines how long ..

  Over extending through debt financing

You brought up that over extending through debt financing can severely limit future cash flow and stifle growth. I think its important to realize the balance necessary to maintain a successful firm and that relying too much on anything can be a limit..

  Interest payment is the result of the real rate of interest

Imagine you borrow $500 from your roommate, agreeing to pay her back $500 plus 10 percent nominal interest in one year. Assume inflation over the life of the contract is expected to be 3.50 percent. What is the total dollar amount you will have to pa..

  Forecasting the income statement

Income Statement Hermann Industries is forecasting the following income statement: Sales $4,000,000 Operating costs excluding depreciation & amortization 2,200,000 EBITDA $1,800,000 Depreciation and amortization 320,000 EBIT $1,480,000 Interest 280,0..

  Stock price accoridng to the constant growth divident module

The Black Bear Company just paid an annual dividend of $5.98. If you expect a constant growth of 8%, and you have a required rate of return of 12.65%. What is the current stock price accoridng to the constant growth divident module (Gordon module)?

  Residual dividend policy results-consistent dividend stream

Which of the following is true? a. In industries with volatile earnings, the residual dividend policy results in the most consistent dividend stream. b. If the clientele effect is correct, firms should follow a constant dividend payout ratio policy. ..

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