What is the maturity risk premium

Assignment Help Accounting Basics
Reference no: EM132504501

Question - The real risk-free rate is 3%, and inflation is expected to be 4% for the next 2 years. A 2-year Treasury security yields 8.0%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place.

Reference no: EM132504501

Questions Cloud

Distinguish between dividends and share repurchases : Does the use of dividends and share repurchases vary across countries? Identify three industries with high dividend payouts.
Calculate the current yield to maturity : Calculate the current price of a $5,000 par value bond that has a coupon rate of 12 percent, pays coupon interest quarterly
What is the nominal annual yield on the bonds : What is the (nominal annual) yield on these bonds? The (effective annual) yield on these bonds? The Great Northern Specific Railway has noncallable.
Implement and evaluate security testing tools : Implement and evaluate security testing tools in a realistic computing environment and implementing and evaluating security testing tools in a realistic
What is the maturity risk premium : A 2-year Treasury security yields 8.0%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place
Create a post-it note size summary of neill paper : For this activity, I would like you to create a Post-It note size summary of O'Neill's paper that includes a summary (try to keep it to one single sentence).
Find what intrinsic value should melanie place of bond : Find What dollar intrinsic value should Melanie place of bond. Melanie Gibson places a nominal annual required rate of return of 14 percent on these bonds.
What are the total estimated cash disbursements : If the cost of raw material purchases in January is $145,680, then in February what are the total estimated cash disbursements for raw materials purchases
What stereotypes did you notice in the advertisements : Consider one of the advertisements you watched that you believe was stereotypical. How could the advertiser have changed the message to convey the information.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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