Year yield on corporate bonds

Assignment Help Finance Basics
Reference no: EM132097078

For this question, assume that the yield curve is NOT humped.

If the 1-year yield on Government bonds is 4% and the 3-year yield on corporate bonds is 6%, which of the following statements is true?

(This is tricky. Think about what higher credit risk does to the yield on a bond.)

Select one:

a. The yield curve is normal.

b. The yield curve is flat.

c. The yield could be normal or humped.

d. It is impossible to make any comment about the shape of the yield curve from the information given.

Reference no: EM132097078

Questions Cloud

Future value of multiple annuities : Assume that you contribute $190 per month to a retirement plan for 20 years. Then you are able to increase the contribution to $290 per month for another 20
Find the refractive index of the liquid : When the light incident on a glass at n.a. angle 35.6 produce refraction. When it is immersed in a liquid the the angle of refraction is same as the previous.
What was the capital gain of the tips in dollars : At the beginning of this year, the CPI was 197.40 and was at 202.50 at the end of the year. What was the capital gain of the TIPS in dollars?
What is the focal length of the lens being used : The distance between an object and its upright image is 20cm. If the magnification is 0.500, what is the focal length of the lens being used to form the image?
Year yield on corporate bonds : If the 1-year yield on Government bonds is 4% and the 3-year yield on corporate bonds is 6%, which of the following statements is true?
Evaluate the appropriate source of finance for BreadTalk : Managing Financial Resources and Decisions Assignment - Evaluate the appropriate source of finance for BreadTalk Group's South-East Asia
Will the pillow cushion the child fall before he hits floor : A child (20 kg) is lying on his hospital bed with the side railings down. The patient turns sideways and starts to fall off his bed, which is 1.2 m tall.
What is the weight of the heaviest fish : A fisherman is fishing from a bridge and is using a "38.0-N test line." In other words, the line will sustain a maximum force of 38.0 N without breaking.
What proportion of patrons spend more than two hours at gym : The manager of a local gym has determined that the length of time patrons spend at the gym is a normally distributed variable with a mean of 80 minutes.

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the us dollar translated figures

Calculate the U.S. dollar-translated figures for the two ending time periods, assuming that between December 31, 2112, and December 31, 2113, the euro has appreciated against the U.S. dollar by6%.

  Computing the cost of preferred? stock

In the spring of 2017 the Marrion Metal Shaping Company was planning on issuing preferred stock to help finance a major plant expansion.

  Analysis of the structure of the current financial system

Prepare a report for the director, carefully addressing the following issues: an analysis of the structure of the current financial system in Australia; structure of and developments in the current Australian banking industry; the regulation of banks..

  Plot the current yield curve from the interest rates of u.s

Plot the current yield curve from the interest rates of U.S. Treasury securities as found in WSJ or IBD, or examine the chart WSJ or IBD provides. Do not send the curve, but do describe and define it (Normal or Inverted).

  Component in the capital structure

Determine the weights of each component in the capital structure: Use the amount of retained earnings (5,150,000) provided. The % composition

  What are actual additional internal and external challenges

What other, unused variables such as political, economic, financial, legal, ethical, and cultural factors might prove useful when assessing the attractiveness of the remaining less than 35 potential international markets and why?

  Angiletta corporation-pv of future cash flows

Angiletta Corporation is considering the new project requiring $30,000 investment in test equipment with no salvage value. Calculate the net present value of investment if straight-line depreciation is used. Use 10% as the discount rate.

  Determine the investment worth at the end of year

You have just purchased an investment that generates the cash flows shown below for the next four years. You are able reinvest these cash flows at 6.98 percent.

  What is the likely explanation for these results

A firm has experienced an increasing current ratio but a decreasing operating cash flow to current liabilities ratio during the last three years. What is the likely explanation for these results?

  How many bonds are in the entire group

What is the total face value of a group of municipal bonds that have a bond interest of 4% per year if the entire group pays quarterly interest payments.

  Success of the scientific revolution

Bronowski, in this week's episode of The Ascent of Man, describes the two great books that Galileo wrote late in his life

  1 explain what stated rate will banksouth have to offer to

1. explain what stated rate will banksouth have to offer to make its semiannual-compounding cd?2now consider the

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