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AURORKA [14]
3 years ago
14

A one-year bond has an interest rate of 5% today. Investors expect that in one year, a one-year bond will have an interest rate

equal to 7%. Investors expect that in two years, a one-year bond will have an interest rate equal to 9%. According to the expectations theory of the term structure of interest rates, in equilibrium, a three-year bond today will have an interest rate equal to
Business
2 answers:
Amanda [17]3 years ago
3 0

Answer:

6%

Explanation:

Current interest rate on one year bond = 5%

Forward interest rate on one year bond = 7%

To Calculate the interest rate on two year bond we use this:

Interest rate = [Current interest rate on one year bond + Forward interest rate on one year bond]/2

Interest rate = [5 + 7]/2 = 12/2 = 6%

Therefore,

The interest rate on two-year bond is equal to 6%.

anygoal [31]3 years ago
3 0

Answer:

A one-year bond has an interest rate of 5% today. Investors expect that in one year, a one-year bond will have an interest rate equal to 7%. Investors expect that in two years, a one-year bond will have an interest rate equal to 9%. According to the expectations theory of the term structure of interest rates, in equilibrium, a three-year bond today will have an interest rate equal to 7%.

Explanation:

The current interest rate on one year bond = 5%

The forward interest rate on one year bond = 7%

The forward interest rate on one year bond = 9%

We can now calculate the interest rate on a three-year bond as below:

Interest rate = [Current interest rate on one year bond + Forward interest rate (7%) on one year bond + Forward interest rate (9%) ]/3

Interest rate = [5 +7+9]/3 = 21/3 = 7%

Therefore,

The interest rate on a three-year bond is equal to 7%.

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IT Support Services is a technology company that offers many IT services in highly populated southern Maine. The company's servi
Vitek1552 [10]

Answer:

<em>broad needs and many customers. (Access-based positioning) </em>

Explanation:

Consumer segmentation that is available in multiple ways.

While their needs are similar to those of other consumers, the difference is the best activity structure to reach them.

Entry can be a feature of company location or consumer size or anything that takes a different set of activities to meet clients in the best possible way.

7 0
3 years ago
If labor costs are 60 percent of production costs, then a 15 percent increase in wage rates would increase production costs by:_
nydimaria [60]

If labor costs are 60 percent of production costs, then a 15 percent increase in wage rates would increase production costs by <u>9 percent.</u>

<h3>What are labor costs?</h3>
  • The total of all employee wages, employee benefits, and payroll taxes paid by an employer constitutes the labor costs. Direct and indirect (overhead) labor costs are separated.
  • While indirect costs are related to labor costs, such as personnel who maintain industrial equipment, direct costs include wages for the employees who make a product, including those on an assembly line.
  • While indirect costs are related to support labor, such as personnel who maintain industrial equipment, direct costs include wages for the employees who make a product, including those on an assembly line.
  • The price of goods or services may fluctuate away from their genuine cost if labor costs are poorly allocated or evaluated, which could hurt earnings.

To learn more about labor costs with the given link

brainly.com/question/5427701

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7 0
1 year ago
Which of these should you consider while communicating in a diverse workplace?
Rudiy27
I would consider demographics, education level, and methods of communication
3 0
3 years ago
Read 2 more answers
In your initial post, you are to write to either the President (on fiscal policy) or to the Chair of the Federal Reserve (on mon
german

Answer:

The existing state of American economy must be declared earlier respondent the interrogation.

The U.S. financial position is vigorous in 2017.The value rate is in its perfect vary i.e., 2.4 (2-3%).Joblessness is at its ordinary proportion and there isn't an excessive amount of rise or decrease. Conversely, the value is predicted to descent to a pair of 2.1% in 2018 and 2.0 in 2019. Drop in value would cause decrease in GDP and growth in state.

To avoid this drop I will be able to inscribe to manager of Federal Reserve Bank to cut back the rate (expansionary financial policy).Federal reserve will try this by shopping for bonds. Once Federal Reserve purchases bonds the money offer increases and rate decreases. As rate decreases mixture demand and financial gain increases. With escalation in financial gain and mixture demand the value wouldn't decrease in 2018 and 2019.

I would not recommend an expansionary economic policy as a result of it increases the rate yet and thus results in situation out.

6 0
3 years ago
Given the following data for Harder Company, compute cost of goods manufactured: Direct materials used $120,000 Beginning work i
il63 [147K]

Answer:

c. $480,000

Explanation:

Cost of goods manufactured        $

Direct materials used               120,000

Direct labor                               200,000

Manufacturing overhead         150,000

Beginning work in process      20,000

Ending work in process          <u> 10,000  </u>

Cost of goods manufactured <u> 480,000 </u>

So, Correct option is c. $480,000

4 0
3 years ago
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