Treasury securities that have an interest rate

Assignment Help Business Economics

Reference no: EM131011494

Treasury securities that have an interest rate of 8.5% will mature in six years over the next six years the inflation rate is projected at 6% for each of the next three years and 5% each year there after using T as the number of years to maturity of the bond the maturity risk premium may be computed as follows 0.1%(t - 1). In other words the maturity risk premium of a one year bond is zero assuming the real risk free rate is constant overtime what is the real risk-free interest rate

Reference no: EM131011494

Questions Cloud

What are the estimated commissions revenues for trs in the : TRS is a large securities dealer. Last year, the company made 90,000 trades with an average commission of $90. Because of the general economic climate, TRS expects trade volume to decline by 10%. Fortunately, the average commission per trade is likel..

Same after tax rate of return to an investor : The state of Delaware issued and 8.75% bond with a face value of $1000 the bond sales for $1000 improvise 8.75% yield to maturity what-year-old on a corporate bond would result in both bonds providing the same after tax rate of return to an investor ..

Are they political or economic considerations : What are the major reasons for these nations to question their participation in the EU? Are they political or economic considerations?

Maturity premium the real risk-free rate of interest : A three year treasury note as no maturity premium the real risk-free rate of interest is 4% the T note carries a yield to maturity of 14% the expected average inflation rate over the next 12 year is 11% what is the implied inflation rate during ear t..

Treasury securities that have an interest rate : Treasury securities that have an interest rate of 8.5% will mature in six years over the next six years the inflation rate is projected at 6% for each of the next three years and 5% each year there after using T as the number of years to maturity of ..

Comparing municipal bond and treasury bond : you are comparing a municipal bond and a US treasury bond as a possible investment for your corporation both bonds have the same maturity and both bonds are equally risky and equally liquid the treasury bonds yield 7% your corporations marginal incom..

Define leverage- what is leverage : As we get started with this discussion, I want us to define leverage- what is leverage? In addition, s financial leverage an area that should be carefully balanced and monitored? Is it possible to have too little or too much leverage?

What is the profit a typical firm will make : Calculate the short run supply curve for a representative firm as a function of price

How much of the living dinosaurs would be remaining tod : Suppose we had a 66 million year old dinosaur fossil. How much of the living dinosaur's 14C would be remaining today?

User Account

All Pages