What happens if the expected default rate rises to 8 percent

Assignment Help Econometrics
Reference no: EM131353691

If the expected default rate on a particular mortgagebacked security is 4 percent per year, and the corresponding Treasury security carries a 3 percent annual interest rate, what should be the interest rate on the mortgage-backed security? What happens if the expected default rate rises to 8 percent?

Reference no: EM131353691

Questions Cloud

Major sources and emissions of air pollution : What are the major sources and emissions of air pollution in your community? What chemicals are they emitting, and how are these chemicals transported through your community (non-point sources, smokestacks, etc.)? Were you surprised at the results..
Discuss the effects of exercise on each of the following : Imagine that you are a training consultant for a professional soccer player. Discuss the effects of exercise on each of the following with your client:Fat metabolism,Protein metabolism,Carbohydrate metabolism.
Partial pressure of ethane in the flask : A 1.00 L flask is filled with 1.00 g of argon at 25 °C. A sample of ethane vapor is added to the same flask until the total pressure is 1.350 atm. What is the partial pressure of argon in the flask and what is the partial pressure of ethane in the..
Ideal gas law questions : Need help with these ideal gas law questions. A quantity of CO gas occupies a volume of 0.63 L at 2.0 atm and 337 K. The pressure of the gas is lowered and its temperature is raised until its volume is 3.0 L.
What happens if the expected default rate rises to 8 percent : What happens if the expected default rate rises to 8 percent?
Critic the design of the object chosen : Critic the design of the object chosen. Was the design successful in your opinion, why or why not? Does function (what it does) and form (design) enhance the product and make the object more appealing?
Calculate the volume of the balloon at altitude : The balloon rises in the atmosphere to an altitude where the pressure is 375 mmHg and the temperature is -13.0 °C. Assuming the balloon can freely expand, calculate the volume of the balloon at this altitude.
Describe the types of organizational interventions : Describing two types of Organizational Interventions used by corporations and the issues they address. Compare and contrast the interventions utilized by the corporations in your articles.You must use at least two scholarly sources (which may be y..
What effect did policy likely have on u.s. trade deficit : In 2001, 2002, and 2003, Congress passed the series of tax cuts that President Bush had requested. What effect did this policy likely have on the U.S. trade deficit? Why?

Reviews

Write a Review

Econometrics Questions & Answers

  Calculate the expected returns and standard deviations

Evaluate the merit or otherwise of the above statement by commenting on the R2 values of the estimated CAPM regressions above.

  Which investment is the riskier and why

Which investment is the riskier? Why? (Hint: Remember that the risk of an investment depends on its context.)

  With which worker does diminishing marginal returns set in

Joe runs a farm. He rents the land for $100 a day, and he can hire workers for $20 per day for each worker. His short run production function is given in the first two columns of the following table.

  What price-quantity combination maximizes revenue

You are the manager of a monopoly, and your demand and cost functions are given by P= 200 - 2Q and C(Q)= 2000 + 3Q^2, respectively. a. what price-quantity combination maximizes your frm's profits b. calculate the maximum profits.

  Explain how is the firm covering its avc at prices

Suppose a perfectly competitive firm has the short-run cost function C = 125 + q2. The associated marginal cost (MC) for this total cost funct ion is 2q.

  What quantity of gps devices will the firm produce

A firm produces GPS devices in a monopolistically competitive market and has the following cost function: TC = 270 + 40Q + 2Q2 MC = 40 + 4Q Demand for this firm's product is given as: QD = 500 - 2P a) To maximize profits,what price will it charge

  What are perceived as higher quality cars

Can you think of examples in the automotive industry where consumers are willing to pay more for what are perceived as higher quality cars? Can you offer counterexamples in either the automotive or another industry where consumer practices are sol..

  Calculate the price elasticity of demand for values of q

A demand curve is given by the following equation: P = -2Q + 40. i) Calculate the Total Revenue when Q = 5 and when Q = 8. ii) Calculate the price elasticity of demand between Q = 5 and Q = 8. Round decimal answers to two places.

  Determine the damping coefficient due to the air film

A square plate of area 20 × 20 μm2 is spaced by a gap 2 μ m from a substrate in air at room temperature and then oscillates with a small amplitude at a frequency of 40 kHz.

  Profit is the incentive to innovate explain it

‘‘Profit is the incentive to innovate. Government intervention can only reduce it, and therefore stifle the innovation process.'' Discuss the expected relation between taxation and growth in the light of this statement.

  When losing money on mondays still a good business decision

Would consumers be better off in terms of welfare, when you compare a firm in monopolistic competition, oligopoly, and monopoly to one in perfect competition? Two sources in addition to your textbook are required for this paper. However, you didn'..

  In which is the total amount produced greater

Compare the scale of agricultural production in the advanced and developing economies. In which is the percentage higher? In which is the total amount produced greater?

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