Reference no: EM131340390
The U.S. Treasury issues bonds where the return is indexed to the consumer price index. We should expect that these bonds, relative to other U.S. Treasury bonds, will have: highlight your answer
A. lower price and lower return due to the decreased risk.
B. lower price and a lower fixed return since the demand for them should be higher.
C. higher price and higher fixed return since we always seem to have some inflation.
D. higher price and lower return due to the decreased risk from inflation in holding these bonds.
2. The use of cash budgeting procedures
A. Helps the firm plan its current asset levels for a given production plan.
B. Makes managing inventory easier under seasonal production.
C. Illustrates fluctuating levels of current assets for a given production plan.
D. All of the options are correct.
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Identify and discuss key issues in benefit planning
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Write out the equation to solve for yield to maturity
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The use of cash budgeting procedures
: The use of cash budgeting procedures. The U.S. Treasury issues bonds where the return is indexed to the consumer price index. We should expect that these bonds, relative to other U.S. Treasury bonds, will have:
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Present value is greater than its price
: If the 15-year Treasury Bond has a par value of $1,000, price of $1,200, and a 7.5% coupon rate, we know the: highlight your answer A. present value is greater than its price. B. current yield is equal to 8.33%. C. coupon payment on this bond is equa..
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Earning the current annual rate of return
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Look closely at the current annual rates of return
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How much interest will you owe at end of first year
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