What is the best estimate of the nominal interest rate

Reference no: EM13281581

Absalom Motors's 14% coupon rate, semiannual payment, $1,000 par value bonds that mature in 15 years are callable 3 years from now at a price of $1,075. The bonds sell at a price of $1,352.47, and the yield curve is flat. Assuming that interest rates in the economy are expected to remain at their current level, what is the best estimate of the nominal interest rate on new bonds? Round your answer to two decimal places.

Reference no: EM13281581

Questions Cloud

Buyer and seller have signed the closing documents : Explain and analyze the activities that will take place once the buyer and seller have signed the closing documents at the title company. Compare and contrast what occurs at the title company and the bank before ownership is transferred from seller t..

Determine the amplitude of the subsequent oscillations : A 750 air-track glider attached to a spring with spring constant 10.5 is sitting at rest on a frictionless air track. What is the amplitude of the subsequent oscillations

What is nominal interest rate on a 7-year treasury security : What is the nominal interest rate on a 7-year Treasury security? Round your answer to two decimal places.

Define rank from highest to lowest boiling point : Based upon the intermolecular forces present, rank the following substances according to the expected boiling point for the substance. Rank from highest to lowest boiling point. To rank items as equivalent, overlap them. HCl, NaCl, N2, H2O

What is the best estimate of the nominal interest rate : what is the best estimate of the nominal interest rate on new bonds? Round your answer to two decimal places.

What is the value of gravity : On your first trip to Planet X you happen to take along a 215 mass, a long spring, a meter stick, and a stopwatch. You're curious about the free-fall acceleration on Planet X, What is the value of gravity

What is the projected ending cash balance at the end : The firm has monthly cash expenses of $160. What is the projected ending cash balance at the end of March? Assume every month has 30 days.

Addressed by the new economic policy : Compare the activities of the Soviet film industry during the War Communism period (1918-1920) and during the years of the New Economic Policy (1921-1924). What difficulties aroee for the industry during War Communism, and how were these problems rem..

Explain the dotted lines represent the allowed energies : Consider the two diagrams showing the energies (boxes) of each of four A particles and four B particles shown below. The dotted lines represent the allowed energies of each particle.

User Account

All Pages