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Mazyrski [523]
3 years ago
6

Suppose that the yield curve shows that the one year bond yield is 3 percent, the two year bond is 4 percent, and the three year

yield is 5 percent. Assume that the risk premium on the year bond is zero, the risk premium on the two year bond is 1 percent, and the risk premium on the three year bond is 2 percent.
a) What are the expected one year interest rates next year and the following year?

b) If the risk premiums were all zero, as in the expectations hypothesis, what would the slope of the yield curve be?

Business
1 answer:
Andreyy893 years ago
7 0

Answer: (a) i2 = 3% i3 = 3%

(b) Downward slope

Explanation:

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shusha [124]

Answer:

Insolvent banks;Solvent banks.

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A bank run can be defined as a situation where bank clients or depositors make withdrawals of their money simultaneously from banks as a result of being scared or afraid the depository institution will run out of cash (bankruptcy) and become insolvent.

The problem with bank runs is not that insolvent banks will fail; they are, after all, bankrupt and need to be shut down. The problem is that bank runs can cause solvent banks to fail and spread to the rest of the financial system.

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6 0
3 years ago
When creating a data backup plan or policy, what five basic questions should be answered?
Tresset [83]
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6 0
3 years ago
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Sloan [31]

Answer:

Functional need

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Functional need -

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Sarah bought a cycle , but as soon as she realized that basket is important for keeping her bag and other item .

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3 0
4 years ago
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andrew-mc [135]

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5 0
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