Question

What is the highest expected return these bonds could​ have? At the​ time, similar maturity Treasuries had a yield of 0.89 %. Could these bonds actually have an expected return equal to your answer in p

Answer 1

Answer: A bond's expiration date depends on the type of the bond and the state the bond is issued for. Some bonds expire a year from the issuance date. Some bonds have longer terms and might not expire for two, three, four or more years. Other bonds expire on a certain date regardless of when they were issued.

Explanation: Most commercial bonds are good for 1-3 years, but can vary depending on the bond type. Court bonds are effective for as long as is necessary, as determined by the court in whose jurisdiction the bond is issued.

Answer 2

Answer:

a. For a risk-free system, y = 2.05%

b. no

Explanation:

The expected return on a given business investment is commonly known as the expected or estimated value of the return of the business investment. It is usually obtained by taking into account the center of distribution of a random variable. In part (a), the highest expected return is approximately 2.05%. in part (b) it is not possible.