1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
AURORKA [14]
4 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]4 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]4 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%.

You might be interested in
Chuck has AGI of $71,600 and has made the following payments
kodGreya [7K]

Answer: $4,690

Explanation:

From the above, Chuck can include the following with his itemized deductions,

County Real Estate Tax,

School District Tax on Realty,

State Income Tax estimated Payments and

State income tax withholding.

Calculating the above,

= 950 + 670 + 1,010 + 2,060

= $4,690

the amount of taxes that Chuck can include with his itemized deductions is $4,690.

7 0
3 years ago
Tyrone found a job posting for a customer service coordinator. Which of his experiences should he include on his résumé to demon
kvasek [131]

Answer:

The correct answer is letter "A": handle calls for the computer helpdesk personnel during heavy call times.

Explanation:

Customer service positions require employees to handle many different types of problematic cases in a given working day. Representatives must be willing to deal with frustrated customers who may be claiming for something fair as well as for things that the company you work in is not responsible for.

In that case, Tyrone should include his computer helpdesk experience since it is closely similar to the customer service coordinator position he is applying for.

4 0
3 years ago
The financial statements report the cumulative impact of all transactions recorded as of the financial statement date. Input the
cluponka [151]

Answer:

True

Explanation:

Financial statements reports the impact of all business transactions that occur. These transaction are recorded when they incur and then any necessary adjustment is made in order to reflect the true expense or liability. the adjusting entries are passed to correctly record the transaction.

5 0
3 years ago
What is the correct answer...A, B, or C?
seraphim [82]
C or B is correct. I would lean towards C, but realistically it could be B. 
7 0
3 years ago
Read 2 more answers
In ____ communication schemes the sender and receiver are linked and ready to send and receive
bazaltina [42]

Hello, Mandalou7124. Thanks for writing in.

You asked: In ____ communication schemes the sender and receiver are linked and ready to send and receive.

From that problem, you are asking to fill in the blank.

The answer that goes in the blank is Synchronous.

You would rewrite it like: In <u>synchronous</u> communication schemes the sender and receiver are linked and ready to send and receive.

Synchronous is like something is occurring but something else is happening at the same time. In this case, they are ready to send and receive.

7 0
3 years ago
Other questions:
  • Ricardo, who is self-employed, uses his automobile 85% for business and during 2019 drove a total of 32,200 business miles. Info
    6·1 answer
  • A way of buying, in which you can purchase goods or services and pay later, is called:
    10·1 answer
  • Consider the following sequence of events: Congress passes a bill. The president vetoes it. Congress overrides the veto. The bil
    10·1 answer
  • A model that shows the trade-offs and opportunity costs of producing an additional unit of a good relative to what must be given
    9·1 answer
  • Paid rent of Rs.25000 by cheque. make journal entry ​
    14·1 answer
  • Morgan Sigma plans to deposit money into her checking account. She has one $100 bill, two $20 bills, six $10 bills, four quarter
    14·1 answer
  • Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $265,000, vari
    15·1 answer
  • After posting the adjusting entry to record revenues for which the seller has performed of its obligations but has not yet colle
    11·1 answer
  • Daniel is writing a letter to the editor of the local newspaper. He is encouraging citizens to join him in expressing his like o
    7·1 answer
  • Super display book is the automated trading system for the? a nasdaq stock market b american stock exchange (nyse american) c ne
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!