An analyst evaluating securities has obtained the following information. The real rate of interest is 2.8% and is expected to remain constant for the next 5 years. Inflation is expected to be 2.6% next year, 3.6% the following year, 4.6% the third year, and 5.6% every year thereafter. The maturity risk premium is estimated to be 0.1 × (t – 1)%, where t = number of years to maturity. The liquidity premium on relevant 5-year securities is 0.5% and the default risk premium on relevant 5-year securities is 1%.

a. What is the yield on a 1-year T-bill? Round your answer to one decimal place.

b. What is the yield on a 5-year T-bond? Round your answer to one decimal place.

c. What is the yield on a 5-year corporate bond? Round your answer to one decimal place.

Answers

Answer 1

An analyst evaluating securities has obtained the following information, which is mathematically given as

Y1= 4.30%Y5= 6.50%Y5'= 8%

What are the yield on a 1-year T-bill,  the yield on a 1-year T-bill, and the yield on a 5-year corporate bond?

Generally, the equation for Yield on Corporate Bond is mathematically given as

Y= r* + IP + MRP + DRP + LP

Hence

a) For the yield on a 1-year T-bill

Y1== 2.2% + 2.1%

Y1= 4.30%

b) For  the yield on a 5-year T-bond

Where

IP=  (2.1% + 3.1% + 4.1% + 5.1% + 5.1%)/5 = 3.90%

And

MRP = 0.1*(5-1)

MRP= 0.4%

Y5= 2.2% + 3.90% + 0.4%

Y5= 6.50%

c) For the yield on a 5-year corporate bond

IP = (2.1% + 3.1% + 4.1% + 5.1% + 5.1%)/5

IP= 3.90%

MRP  = 0.4%

DRP = 1%

LP = 0.5%

Therefore

Y5= 2.2% + 3.90% + .4% + 1% + .5%

Y5'= 8%

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Related Questions

A consumer must decide between purchasing a new cell phone or renting a new car. Why might determining the opportunity cost be uncertain

Answers

When a consumer has to decide between buying a new smartphone or renting a new car, the determination of opportunity costs is difficult, as both the expenses have different utilities.

What is opportunity cost?

The cost, which is undergone in order to let go of an alternative divestment of such cost, is known as an opportunity cost. An opportunity costs may be backed by emotions and other external factors.

Hence, the significance of opportunity costs is given above.

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The question are on the picture...can someone help me ?​

Answers

small points for bigg questions

In a two-player, one-shot simultaneous-move game each player can choose strategy A or strategy B. If both players choose strategy A, each earns a payoff of 500. If both players choose strategy B, each earns a payoff of 100. If player 1 chooses strategy A and player 2 chooses strategy B, then player 1 earns 0 and player 2 earns 650. If player 1 chooses strategy B and player 2 chooses strategy A, then player 1 earns 650 and player 2 earns 0.
a) Write the above game in normal form.
b) Find each player’s dominant strategy, if it exists.
c) Find the Nash equilibrium (or equilibria) of this game.
d) Rank strategy pairs by aggregate payoff (highest to lowest).
e) Can the outcome with the highest aggregate payoff be sustained in equilibrium? Why or why not?

Answers

Answer:

a) The normal-form game with the two-player, one-shot, simultaneous–move game with each player choosing strategy A or strategy B along with the possible outcome is given by: (see attached image)

b) Dominant strategy is the strategy of a player which provides maximum payoff to the player irrespective of other player's actions.

Player 1 dominant strategy =  when he chooses strategy B

Player 2 dominant strategy = when he chooses strategy B

c) Nash equilibrium is the strategy set of the players in which no individual player can be better off by deviating from their own strategy, given the other player's strategy.

Strategy A is the Nash equilibrium

d) AA  = $800

   AB , BA = $700

   BB = $400

e) Yes because the Nash equilibrium is the same as the highest ranking strategy pair (AA  = $800)

Using the (DMP) Model. (1) What determines a consumer’s decision to search for work? (2) What determines a firm’s decision to post a vacancy? (3) When a worker and firm are matched, what determines the wage paid to the worker? (4) Discuss the likely equilibrium effects of unemployment benefit (b) in the DMP model

Answers

Using the DMP Model the factor that determines a consumer’s decision to search for work are:

The labor force, titled as Q. The payoff gotten from home production.The payoff gotten as a result of searching for market work.

What factor determines a firm’s decision to post a vacancy?

They are:

1. The cost that one gets from posting a vacancy, k

2. The wage rate which the suppose firm would pay, w

3. The outcome or the output that worker will make, z, etc.

Note that in DMP model, if a worker and firm are matched, the factor that determines the wage paid to the worker is the equation of :

w = a(z-b) + b,

Where a(z-b) =  Share the worker will get from the total share as a result of the bargain, based on the worker's bargaining power.

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Hugo Munsterberg is known as

Answers

Answer:

A Famous German Psychologist

Answer:

A physiologist.

Explanation:

"Hugo Münsterberg was a German-American psychologist" (Wikipedia.) I hope this helps! :)

Investors always make money from investing in the stock market.

A. True
B. False

Answers

"Investors always make money from investing in the stock market." is a false statement. This is further explained below.

Who is an Investor?

Generally, an Investor is simply defined as a profit-seeking financier.

In conclusion,  Investing in the stock market might result in a wide range of losses. Figure out how to deal with each one of them.

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can u solve this plsss​

Answers

The main reason why the Japanese liberalized the bank mergers in Japan was to protect the economy and prevent an economic crash.

What is Financial Liberalization?

This refers to the removal of regulatory control in the financial sector to promote economic growth.

The government of Japan faced an economic crash that threatened to cripple the economy due to stock market crash, failing banks, etc and there was the use of risk-based capital to try and prevent this, amongst other solutions.

Hence, we can see that the key aspects of the liberalization program were:

MergersAcquisitions.

The key criticism of the program is that it failed to address the scale of the problem and the solution was only short-term.

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Briefly summarize the concept of the division of labour. What does Smith think is good about the division of labour?​

Answers

Answer:

the division of labor was a way to make laboring the old times more fair in a way

Explanation:

Jack recently took out a loan from Diane at an interest rate of 4 percent. Diane expected this year’s inflation rate to be 1 percent and the real interest rate to be 3 percent. The loan is due at the end of this year. Complete the table below by computing the real interest rate for each possible inflation rate. For each situation, determine whether the unexpected inflation level benefits Jack or Diane.

Answers

The complete question has been added with an image for better understanding of the concept. The beneficiaries of the inflation and interest rates will be,

When inflation is 1 percent, Diane will benefit more than Jack;When inflation is 0 percent; Diane will benefit more than Jack; When inflation is 4 percent; Jack will benefit more than Diane; When inflation is -2 percent; Diane will benefit more than Jack.

What is inflation?

A given increase in rates or prices of any commodity, including monies, over a particular financial period is known as inflation.

The rates and beneficiaries due to the unexpected change in inflation for the above situation is given attached in the image in the form of a table.

Hence, the significance of inflation is as mentioned.

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If you are in the 15% tax bracket, your whole
income is taxed at that rate.
True
False

Answers

If an individual's income falls at the 15% tax bracket then his/her income is taxed at first 10% and then the excess 5% should be levied in the next bracket.

What is a tax bracket?

A tax bracket is the income range made by the tax authorities relating to income earned by taxpayers with different rates of taxes.

According to the US taxation rules, the tax levied on the income of the taxpayer should be in the progressive system, which means, that the income should be charged with the different tax rates and not the one single tax rate. As the tax rates are started from 10%, so at the rate of 15%, it should not be the same rate rather the excess 5% would be levied.

Therefore, the provided statement relating to the imposition of tax is false.

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Within the organization, the use of formal committees, training, and codes of conduct help to ensure standards of
A. ethical compliance.
B. legal compliance.
C. philanthropic giving.
D. social responsibility.
E. organizational leadership.

Answers

Within the organization, the use of formal committees, training, and codes of conduct help to ensure standards of ethical compliance.

What is ethical compliance?

Ethical compliance is the ability of an individual or employee to act according to companies code of conduct.

Trainings are usually conducted for newly recruited employee.

Therefore, Within the organization, the use of formal committees, training, and codes of conduct help to ensure standards of ethical compliance.

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The amount you pay monthly, quarterly, semiannually or annually to purchase different types of insurance.

Answers

Answer:

the amount you pay for different types of insurance is called a premium.

what is local business

Answers

Answer:

Any company that provides goods or services to a local population

I hope this helps and answers your question ^^

What is a certificate of deposit, or CD?

Answers

It’s a product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time.

Each marketing function occurs _____ a product or service is developed and sold.

A. one time

B. two times

C. every time

D. none of the above

Answers

Each marketing function occurs every time a product or a service is developed and sold in the market.

What is a marketing function?

A marketing activity, which is essential for the transfer of goods from place of origin to the place of consumption in the market, is known as a marketing function. It is a continuous process.

Hence, option C holds true regarding a marketing function.

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Every line manager is a HR Manager-explain?

Answers

Answer:

assists managers with recruitment, motivation and maintaining employees within the organisation

According to the research presented in the article, how does stress affect memory of consequences?

Answers

Can we please see the article you are referring too. So we can answer it

Ex

It is more challenging to learn when under stress because people find it more challenging to form short-term memories and convert those short-term memories into long-term memories. Stress can have an impact on the kinds of memories we create.

How does stress affect memory of consequences?

Acute and long-term alterations brought on by stress can harm some parts of the brain. The most common memory impairment caused by excessive stress hormone production is long-term delayed recall memory, although it can also improve short-term, instant recall memory. This improvement is most noticeable in emotional memory.

According to the research analyzed, stress does affect retrieval in healthy young men, especially when it is introduced with the TSST in the afternoon and up to 45 minutes before the start of the final memory test.

Studies have shown a bidirectional association between stress and memory. Stress can impact memory formation and retrieval, and traumatizing memories can trigger stress.

Thus, It is more challenging to learn when under stress.

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What is a common way to purchase an automobile?

Answers

Answer: with cash.. or you can set a loan

Explanation:

explain how mobile commerce provides easy access to stores to society

Answers

I think it’s 20 x 345

Which advice would best help you protect your personal information?
A. Respond to any email that looks like it originates from a legitimate
company.
B. Only give out personal information to a person who appears to
have knowledge of your bank account transactions.
C. Click on email links sent from your credit card company, but only if
the email looks legitimate.
D. Never provide personal details to someone who claims to be from
your bank; call your bank directly.

Answers

Answer:

D

Explanation:

because you will never know who wants to hurt you or still from you u need to make sure by phoning your bank immediately before you will regret it

Answer: D. Never provide personal details to someone who claims to be from

your bank; call your bank directly.

Explanation:

A order comes in for two bean burritos and one crunchy taco the starter starts grilling the
tortilla...what should the finisher do

Answers

Answer:

assembling them

Explanation:

An order comes in for two bean burritos and one crunchy taco the starter starts grilling the tortilla. Assembling is the best move. This is further explained below.

What is Assembling?

Generally, to assemble in one area for a shared objective.

In conclusion, The starter begins grilling the tortilla as an order comes in for two bean burritos and one crispy taco. It's smartest to band together.

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What impact does interest have on the cost of the purchases you make when
using credit?
A. Interest can cause the overall cost of your purchases to increase.
B. Interest can cause the overall cost of your purchases to decrease.
C. Interest has no impact because most credit cards do not charge
interest.
D. Interest has no impact because it is separate from the actual
purchase prices.

Answers

Answer:

the answer to this question is letter a because interest will increase the cost if not paid on time

Exercise Answer the following questions 1. What is teaching? Write.​

Answers

Answer:

Teaching can be defined as engagement with learners to enable their understanding and application of knowledge, concepts and processes. It includes design, content selection, delivery, assessment and reflection

Explanation:

mark me as a brilliant

Becker and Riaan Nursery owes Big Nursery Suppliers an amount of R35 000. Due to tough economic conditions, Becker & Riaan Nursery had to resort to providing services on credit and their clients owe them R45 000. Becker & Riaan Nursery also owns equipment to the value of R15 000 and had an unfavourable bank account balance of R20 000.

What is the net worth (equity) of Becker & Riaan Nursery on 28 February 20.2?

Answers

The net worth (equity) of Becker and Riaan Nursery on February 28, 2022, is $5,000.

What is net worth (equity)?

The net worth (equity) represents the excess of financial and non-financial assets over the liabilities of the entity.

Sometimes, an entity or individual may have a negative net worth.  Negative net worth shows that the liabilities exceed the assets.

Data and Calculations:

Accounts Payable (Big Nursery Suppliers) = R35,000

Accounts Receivable = R45,000

Equipment = R15,000

Bank overdraft = R20,000

Assets:

Accounts Receivable = R45,000

Equipment = R15,000

Total assets = R60,000

Liabilities:

Accounts Payable (Big Nursery Suppliers) = R35,000

Bank overdraft = R20,000

Total liabilities = R55,000

Net Worth (excess of assets over liabilities or equity) = R5,000 (R60,000 - R55,000)

Thus, the net worth (equity) of Becker and Riaan Nursery on February 28, 2022, is $5,000.

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What is TRUE about permanent life insurance?

Answers

Because permanent (whole) life insurance protects the insured for their entire life, premiums are due each year until the insured dies. This may prove to be expensive when the insured is retired, and does not earn an income. The correct answer is: The premium-paying period may extend beyond the income-earning years.

Bullors Inc., an apparel manufacturer, prices its products low by selling them only through factory outlets. Therefore, Bullors apparels can neither be bought online nor from any superstores. Which of the following channels is Bullors Inc. using for the distribution of its products?

1. A retailer channel

2. A broker channel

3. A direct channel

4. A wholesaler channel

Answers

The channel that Bullors Inc is using for the distribution of its products is a direct channel

What is distribution?

It should be noted that distribution simply means the way that the goods reach the final consumers.

In this case, the channel that Bullors Inc is using for the distribution of its products is a direct channel sine it's through the company directly

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A one-year insurance policy was purchased on June 1 for $1,920. Journalize the adjusting entry required on December 31. If an amount box does not require an entry, leave it blank.
Dec. 31
- Select - - Select -

- Select - - Select -

Answers

The adjusting entry will be $1120 for the insurance expense. The insurance expense will be debited while the prepaid balance is credited.

How to calculate the insurance expense?

From the information given the insurance expense will be;

= $1920 × 7/12

= $1120

The prepaid balance will also be $1120. Therefore, the adjusting entries will be to debit and credit the amount of $1120.

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In the scenario from question 1, no product was lost or consumed so the net balance remained the same. Why would an organization need to account for location changes of their inventory? Provide a Mathematical example to support your rationale.

Answers

Organization need to account for location changes of their inventory because the control of Inventory helps them to know the amount of inventory  that they have.

What is inventory location?

An Inventory locations is known to be seen as places where inventory is said to be saved and where it is distributed.

Note that Organization need to account for location changes of their inventory because the control of Inventory helps them to know the maximum amount of profit as it is gotten from the least amount of investment in stock without influencing customer satisfaction.

Therefore, Profit = Amount of  stocks available - inventory sold.

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S
Select the correct text in the passage.
Which sentence describes equilibrium in supply and demand?
A cell phone manufacturing company decided to use a price-skimming strategy to enter the market. It set the price of its phones at $450. However, a range of other
premium smartphones was already available in the market, and thus the product did not achieve a good demand. Eventually, when the price of the phone fell to $300,
demand for the product increased and profits began to soar. Now, market research suggests that if the company reduced its price to $275, the quantity demanded would
also rise. The rise in demand was predicted to be 30 percent. However, a profit study revealed that to increase demand, it would have to compromise on profits. Thus, the
company decided to leave the price at $275. This would help them gain enough customers to make a profit while also manufacturing enough phones to meet demand.

Answers

The statement "Eventually, when the price of the phone fell to $300, demand for the product increased and profits began to soar." describes an equilibrium in supply and demand.

What is an equilibrium in supply and demand?

This refers to a situation whereby there is a balance in market supply and demand balance which as a result prices become stable.

Because there is a fall in phone price made the demand for the product increased and profits began to soar, this is an example of an equilibrium process.

Therefore, the Option C is correct.

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The number one job a health inspector has is making sure which of the following happens?

Answers

Answer:

B. Food being served is safe.

Explanation:

In this case, a health inspector's job is to ensure that equipment are sterilized and that the place is following environmental and health laws.

In the case of creating food, a health inspector's job would be to ensure that the place is processing food correctly, creating food that, when consumed, is not toxic to the human body, and that they follow mandatory governmental guidelines for environmental, societal, and individual health.

~

Other Questions
Write instructions for the following: You have a bag filled with jelly beans of three different colors: pink, green, and yellow and 3 cups that cannot be moved arranged in a line in front of you. The end result should be that all the jelly beans have been removed from the bag and placed into cups. Each cup should only contain 1 color. The jellybeans should be placed into the cups so that the pile that is the smallest is on the left, and the pile that is the largest is on the right. Jellybeans cannot be placed anywhere except in the bag or in a cup. 1. Fill in the blank in the following sentence with the appropriate noun.C'est le frre de ma mre. C'est mon .2. Fill in the blank in the following sentence with the appropriate form of the verb aller.Ils en ville faire des courses.3. Fill in the blank in the following sentence with the appropriate word. Note the cue in parentheses.Aujourd'hui, nous sommes le mai. (May 1)4. 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Compose a complete sentence using the words provided.Ils / vouloir / voyager / en France.37. Answer the following question in the negative.Voulez-vous aller dner avec moi ce soir?38. Answer the following question in the negative.Est-ce qu'elles vont aller Paris?39. Translate the following sentence into French.There is no supermarket in my little city.40. Answer the following question in the negative using a full sentence.Est-ce que tu vas la boucherie?please awnsure when you can Which quantity is a vector quantity?A. displacementB. distanceC. massD. temperatureE. volume The base of an isosceles triangle is halfas long as each of the two equal sides.Write the area of the triangle, A(x), as afunction of the length of the base, x.A(x) = If you roll a standard number cube 95 times, how many times do you expect the cube to show a one or a three? Zebra, pelican, puffin, and pegasus are all types of pedestrian crossings in what country?. The graph of y=cosx is translated by (30,-1). 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Are there any limits on what you can change? for example, it would not be realistic to remove all of the farms. is there anything that people cannot compromise on? types what else would you need to know to come up with a plan of action? where could you get that information? t over for nd they 5. and Solve for x.(x2)^2+2=38x= ___ or x= ___ Question 2 of 10Online banking is a convenience that mostly affects which area of your life?A CulturalB. PersonalC. SocialD. Ethical A number x is at least 5 and is at most 8 Creating, developing, retaining, and obtaining products and services that meet consumer needs is called _____.A. distributionB. financingC. marketing-information managementD. product/service management Water and ammonia molecules are roughly the same size and the same mass but ammonia boils at -28F (-33C) and water boils at 212F (100C). What can we conclude about the intermolecular forces between water and ammonia? Evan picks up a cantaloupe that weighs 3.24 pounds. Suppose Evancould buy 100 cantaloupes that are all this weight. Without using themultiplication algorithm, explain how Evan could figure out the totalweight of all 100 cantaloupes. Unlike European immigrants, Chinese immigrantsin the 1800s facedA. language barriersB. laws that severely limited entryC. cultural differencesD. nativist sentiments What was Santiagos reward for saving the ossis