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
Helga [31]
2 years ago
6

Suppose the interest rate on a 1-year T-bond is 5.00% and that on a 2-year T-bond is 7.00%. Assume that the pure expectations th

eory is correct, what is the market's forecast for 1-year rates 1 year from now
Business
1 answer:
Tasya [4]2 years ago
5 0

Answer: 9.04%

Explanation:

1 year rate today = 5% = 0.05

2 years rate today = 7% = 0.07

Maturity of longer bond = 2

The ending return if the 2 years bond are bought will be thesame as the needed return on series of a year bond which will be 1.1449

The market's forecast for 1-year rates 1 year from now will be calculated as:

= 1.05(1+X) = 1.1449

1.05 + 1.05X = 1.1449

1.05X = 1.1449 - 1.05

1.05X = 0.0949

X = 0.0949/1.05

X = 0.090381

X = 9.04%

You might be interested in
What is the difference between legitimate and illegitimate compulsion for enrique dussel? Does he consider both to be violence?
KATRIN_1 [288]

Dussel does not consider legitimate compulsion to be malicious, on the other hand he considers illegitimate compulsion.

4 0
3 years ago
Mullin, inc, purchases supplies such as paper, and seat covers directly from manufacturers and then sells them to other firms. m
scoundrel [369]
<span>Mullin, inc, purchases supplies such as paper, and seat covers directly from manufacturers and then sells them to other firms. mullin, inc. is a (n) wholesaler.
Distribution of goods or things to specific customer types is </span>wholesaling. Wholesaler is a person, company or firm who buys from various producers, a large quantity of goods and then resells to retailers. There are also some types of wholesalers.
8 0
3 years ago
An example of a cost that is likely to have a direct relationship with products being manufactured is
scoundrel [369]

Answer:

An example of a cost that is likely to have a direct relationship with products being manufactured is:

direct cost of raw materials.

Explanation:

Other direct costs that affect the cost of the products directly are direct labor costs and direct overhead costs.  They are traceable to the products being manufactured.  This is why they are called direct costs.  They can be attributed to the unit of production.  The opposite is the indirect  costs of raw materials, labor, and overheads.  These costs cannot be traced to units of the product being produced.

7 0
2 years ago
Jose goes to an all-you-can-eat buffet at a Chinese restaurant and consumes three plates of food. He does not go back for a four
kkurt [141]

Answer:

The marginal utility of the fourth plate is zero or below zero

Explanation:

The reason is that the law of diminishing marginal utility says that the marginal utility of a product declines upon continuous consumption of that item. This means that the utility before the consumption of first buffet was high and when the second buffet was consumed by the same person the utility was further reduced and so on. This means that the utility must be positive which if is higher enough then the customer is will to pay and eat the buffet again. If it is zero or below zero the customer is not willing to pay for the buffet. This is the reason the person doesn't ordered the item again.

You can not eat the same buffet for all the 365 days. This means the taste of a tasty food fades away after some time or I would say that the utility is gone. Same is the case when you will keep using cellphone for a period and then sell it or dispose it because the item doesn't entertains you or in other words the utility has significantly fallen and is almost zero or below zero.

5 0
3 years ago
Buchi owns several financial instruments: stocks issued by seven different companies, plus bonds issued by four different compan
denpristay [2]

If Buchi owns several financial instruments: stocks issued by seven different companies, plus bonds issued by four different companies, her investments are best described as a PORTFOLIO

A range of investments owned by an individual is termed a portfolio.

For instance, when an individual owns different stocks, bonds, and businesses in diverse companies, such an individual is known to have a portfolio.

Portfolios are important for long-term financial goals even though the returns on such portfolios are not immediate.

According to the question, if Buchi owns several financial instruments: stocks issued by seven different companies, plus bonds issued by four different companies, her investments are best described as a PORTFOLIO

Learn more here: brainly.com/question/24598517

7 0
2 years ago
Other questions:
  • The following is the income statement for the period ending December 31, Year 1, for Manatee Construction Company:
    11·1 answer
  • An advantage of using one diagnostic manual is that _____
    12·1 answer
  • Nick purchased a $100,000 participating whole-life insurance policy on his life. To date, he has paid $50,000 in total premiumsa
    10·1 answer
  • In a free-market economy, firms face some degree of uncertainty, or risk. Some of this risk is controllable, and some is not. Id
    8·1 answer
  • Assume that the market for chocolates is perfectly competitive. Which of the following statements would be true in this​ case? A
    5·1 answer
  • Does 3d rendering boost the sales ?
    6·1 answer
  • When fast food restaurant, tommy's tacos, had poor sales in central city, marketing managers closed one outlet on the east side
    15·1 answer
  • The owner of a life insurance policy has decided to surrender the life insurance policy to the insurer. Since inception of the l
    14·1 answer
  • The goal of global market segmentation is to break down a new foreign market for a product or a service into different groups of
    13·1 answer
  • The most liquid monetary aggregate is: ___.
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!