What is simpson rate of return

Assignment Help Business Economics
Reference no: EM133081829

Simpson purchased a 3-year bond with the face value of $20,000 in the primary market. The current risk-free interest rate was 0.25%, and a risk premium on that bond was 3%. A year later after collecting yearly coupon payment, Simpson decided to sell that bond in the secondary market. By that time, the economic situation had improved, and the risk-free interest rate had risen to 1%. What is Simpson's rate of return for the one-year period he held the bond? Please show all your steps/work to get full points.

Reference no: EM133081829

Questions Cloud

Compute increase or decrease in the demand curve : The firm that hired you projects that changes in consumer demographics will cause the Demand curve to change to 9g = 250 - 5P. Does this change represent an inc
Central assumptions of neoclassical economics : Why does neoclassical economics rely so heavily on underlying assumptions of human behavior and how have those assumptions been refuted by the emerging field of
Comment on collective sustainability : Comment on collective sustainability, collective ethics and justice doing in relation to social work practice - Have a practice of Dr Kristin Neff's Self
Determine the market equilibrium point : At a unit price of KES 16,000, the demand of a product is 300 units and at a unit price of KES 48,000 the demand is 100 units. At a unit price of KES 30,000 the
What is simpson rate of return : What is Simpson's rate of return for the one-year period he held the bond? Please show all your steps/work to get full points.
What is the growth rate of per capita income : Consider the Solow model. The economy of Oz produces its output using capital and labor. The labor force is growing at 2% per year. At the same time, there is t
What is the probability that the person is really sick : Assume that 1 out of 270 people in the US are afflicted with a particular disease. There is a test for the disease that is 97% accurate; meaning 3% of the time
Change in quantity demanded and change in demand : 1. Distinguish between a change in quantity demanded and a change in demand. Provide diagrams and a written explanation.
Estimates parameters or a group of explanatory variables : 1. How to check the multicollinearity in panel regression such as random effects?

Reviews

Write a Review

Business Economics Questions & Answers

  A firm that has the long-run cost curves

A firm that has the long-run cost curves shown in the graph above would be able to do or have the following, except:

  Create the activity and resource usage schedules

The first step in earned value management is to: create the activity and resource usage schedules. develop a time-phased budget that shows expenditures across the project's life. total the actual costs of doing each task to arrive at the actual cost ..

  Find walrasian equilibrium prices and equilibrium allocation

Consider a pure exchange economy with two individuals (call A and B) and two goods (called X and Y ). Individual A has 120 units of good Y but no good X, and A's utility function is given by UA(xA, yA) = ln(xA)+ln(yA). Find the Walrasian equilibrium ..

  What is abc corp combined ratio

It has losses of $5.41 million and expenses of $2.23 million. Its dividend ratio is 6.12 percent. What is ABC Corp.'s combined ratio?

  Annual mortgage payment to the bank

You have decided to buy a small apartment building for $100,000 near a local college. You used $10,000 as a down payment and obtained a mortgage from a local bank for the remaining $90,000. The annual mortgage payment to the bank is $11,500. You expe..

  Indicative of unstable multiparty system

What would likely be indicative of an unstable multiparty system? Which of the following "isms" is committed to a significant reduction in economic inequalities, but not total economic equality?

  Pool of utilized textbooks grows further during second yr

Assume that the pool of utilized textbooks grows further during the second year of the latest edition

  Minimize the business recovery time

You are the Chief Security Officer for a Video Club Store; List the measures that you will institute to minimize the Business Recovery time.

  What is the significance of core deposits to bankers

What is the significance of "core deposits" to bankers?

  Market elasticity of demand for your firms product

Based on the best available econometric estimates, the market elasticity of demand for your firms product is -2. The marginal cost of producing the product is constant at $150, while average total cost at current production levels is $225. Determine ..

  Problem with the retailer

How will you overcome this problem with the retailer? And what adjustments would you make to service delivery to ensure such problems don't occur again?

  Practice of charging different customers

Price discrimination is the practice of charging different customers or groups of customer's different prices for the same product.

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