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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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Talking to the employee will reveal if they are out-group members and enable Anna-Marie to understand their views.

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An out-group member is an individual in an organization who does not identify themselves as part of the group or unit.

An out-group member does not pursue the same goals as other group members and most times feels excluded from the group.

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<h3>What is counterfactual thinking?</h3>

Counterfactual thinking is done when an individual needs alternative methods or way to do a thing that has been done.

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Therefore, Indra is using counterfactual thinking to discover alternatives for a past unexpected outcome the next step for her is to identify other factors that may serve as hindrance and need to be overcome.

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Prepaid insurances are considered expenses of a company. Thus, <em>if the payment of the prepaid insurance was not recorded, the net income of the firm will be overstated.</em>

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