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Anit [1.1K]
3 years ago
12

Assuming the expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure

for maturities of one to five years, and plot the resulting yield curves for the following paths of one-year interest rates over the next five years: a. 5%, 7%, 7%, 7%, 7% b. 5%, 4%, 4%, 4%, 4% Mishkin, Frederic S.. Economics of Money, Banking and Financial Markets, The (What's New in Economics) (p. 139). Pearson Education. Kindle Edition.

Business
1 answer:
Trava [24]3 years ago
3 0

Answer:

The plot of the yields is attached.

Explanation:

i) 6%, 7%, 8%, 7%, 6%

Interest rate on 1 year maturity = 6%/1 = 6%

Interest rate on2 year maturity = (6%+7%)/2 = 6.5%

Interest rate on 3 year maturity = (6%+7%+8%)/3 = 7%

Interest rate on 4 year maturity = (6% + 7% + 8% + 7%)/4 = 7%

Interest rate on 5 year maturity = (6% + 7% + 8% + 7% + 6%)/7 = 6.8%

ii)6%, 5%, 4%, 5%, 6%

Interest rate on 1 year maturity = 6%/1 = 6%

Interest rate on 2 year maturity = (6% + 5%)/2 = 5.5%

Interest rate on 3 year maturity = (6% + 5% + 4%)/3 = 5%

Interest rate on 4 year maturity = (6% + 5% + 4% + 5%)/4 = 5%

Interest rate on 5 year maturity =   (6% + 5% + 4% + 5% + 6%)/5 = 5.2%

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Shadee Corp. expects to sell 550 sun visors in May and 380 in June. Each visor sells for $12. Shadee’s beginning and ending fini
djyliett [7]

Answer:

August = $5, 472

September = $5,419

Explanation:

Shadee Corporation

Cash Receipt Budget

For the month of August & September

August September

Sales Volume 460 470

Price per unit 12 12

Total Sales $5,520 $5,640

60% Cash Sales $3,312 $3,384

Credit Sales:

54% collected in the month of sales

$1,192 $1,218

37% collected in the following month

$968 (1) $817

Total budgeted cash receipt

$5,472 $5,419

Note: (1)

37% of July's credit sale will be collected in the month of August. Therefore,

July's total sales = 545 × 12 = $6540

60% of them is cash = $3,924

Remaining is credit = $2,616

37% of credit sales = $2,616 × 37% = $968

7 0
3 years ago
Which of the following is associated with the market development strategy?
pantera1 [17]

Answer: Option (c) is correct

From the given option the following is associated with the market development strategy: <em>Adding new features to products.</em>

Market development refers to the technique under growth strategy that visualize and establish new market segments for their products. This terminology targets non-buying individuals in targeted segments. This also targets new individuals in new segments.

4 0
3 years ago
A _____ consists of assessing an employee's performance and providing him or her with appropriate feedback.
larisa [96]

performance appraisal consists of assessing an employee's performance and providing him or her with appropriate feedback.

<h3>What is performance appraisal?</h3>

Performance appraisal is done to check the performance of a particular employee.

It is done from time to time through the review of workdone and contribution of such individual to the organizations.

Therefore, performance appraisal is consists of assessing an employee's performance and providing him or her with appropriate feedback.

learn more on performance appraisal here,

brainly.com/question/24673911

3 0
2 years ago
Read 2 more answers
Cardinal Industries purchased a generator that cost $11,000. It has an estimated life of five years and a residual value of $1,0
gogolik [260]

Answer:

2080 dollars

Explanation:

Given that Cardinal Industries purchased a generator that cost $11,000

cost of generator = 11000

Estimated life       = 5 years

Residual value     =1000

Hours                    =5000

Depreciation per unit hour = (Cost - residual value)/total lifetime hours

=\frac{11000-1000}{5000} \\=2

For first year the generator was used for 1,040 hours.

Hence depreciation to be charged in I year

= 1040(2)\\=2080

answer is 2080 dollars.

3 0
3 years ago
According to the FASB conceptual framework, the rele-vance of providing information in financial statements is subject to the co
Liula [17]

Answer:

B. Cost-Benefit

Explanation:

According to the Financial Accounting Standard Board (FASB) framework, it is important to estimate the cost and benefit of information before deciding the relevance of the information. It decides when to disclose and whether to disclose the information

Once, the cost of such information outweighs the benefits of its disclosure then FASB framework terms it as not relevant.

Cost of Information

Financial reporting through the preparation of financial statements has a cost, these costs include provision, preparation as well as the audit of the information provided. The cost-benefit constraint basically intends to ensure that financial statements are most-effectively and most-efficiently prepared.

6 0
3 years ago
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