Why is there a differences in the rates

Assignment Help Finance Basics
Reference no: EM132048599

Question: At the present time, 10 year Treasury bonds are yielding 5.0%, where as investment grade corporate bonds (BBB rated-10 year) are paying 7%, please answer the following:

1. Why is there a differences in the rates? Please advise in financial terms and concepts. The response must be typed, single spaced, must be in times new roman font (size 12) and must follow the APA format.

Reference no: EM132048599

Questions Cloud

What is the present value of a payment in one year : What is the present value of a $290 payment in one year when the discount rate is 7 percent? (Round your answer to 2 decimal places.)
Idea of developing a special line of gourmet pasta : Tim's Delicatessen is entertaining the idea of developing a special line of gourmet pasta sauce made with sundries tomatoes, mushrooms and truffle oil.
What is the present value of the second option : You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements.
Improved cost information : We just went through a process of looking through our costs in excruciating detail. We were actually selling one brand, Nut Ale, below cost.
Why is there a differences in the rates : At the present time, 10 year Treasury bonds are yielding 5.0%, where as investment grade corporate bonds (BBB rated-10 year) are paying 7%.
What is the present value of given amount per year : What is the present value of $3,025 per year, at a discount rate of 9 percent, if the first payment is received 10 years from now and the last payment.
Determine your effective annual rate of return : Suppose the call money rate is 6 percent and your broker charges you a spread of 1.5 percent over this rate.
Cost of goods finished and transferred out of the wip : Cost of goods finished and transferred out of the WIP Inventory Account during a specific period
What is the present value of deposit : What is the present value of a $3,400 deposit in year 5 and another $3,900 deposit at the end of year 9 if interest rates are 10 percent?

Reviews

Write a Review

Finance Basics Questions & Answers

  The loan will be a fixed-rate loan

Jack is considering buying one of two houses.  House A costs $ 150,000.  It will require him to get a new loan for  80% of the purchase price; the closing costs on this loan will be $3,700.  The loan will be a fixed-rate loan for 30 years at 5.0% int..

  Venture capitalists will frequently

Venture capitalists will frequently

  Measure the variability of individual stocks

Describe how variance and standard deviation are used to measure the variability of individual stocks.

  Where marginal cost and marginal revenue are equal

If so, how can that be done? If the concept is applied, how confident should we be that the firm will achieve the point where marginal cost and marginal revenue are equal

  Question 1 lonotek limited innotek is a company listed on

question 1 lonotek limited innotek is a company listed on singapore exchange and manufactures data storage devices. one

  What are the implications for financial statement users

What does he mean? Provide some examples. What are the implications for financial statement users?

  Discuss how presentment has changed with electronic banking

Discuss how presentment has changed with electronic banking and how difficult catching issues has become. Federal laws now govern much of the old paper.

  What covalent total value

What Covalent's total value? If the firm currently (before the expansion) has 20 million shares of stock, what is the price per share?

  Analyze the approaches to capital structure decisions and

analyze the various ways to determine the cost of capital and determine which is the most difficult to get right.

  What interest rate would be used for discounting purposes

A certain engine lathe can be purchased for $150,000 and depreciated over three years to a zero salvage value with the SL method.

  Compute an amortization schedule

Compute an amortization schedule for a $95,000, 10 Year annual amortization loan, paying 8% payments are to be made at the end of the year.

  What is the current share price if the required return on th

Apocalyptica corp. pays a constant $9.75 dividend on it stock . the company will maintain this dividend for the next 11 year and will then cease paying dividend forever. if the required return on this stock is 10 percent, what is the current share pr..

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