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
Mamont248 [21]
3 years ago
9

You observe the following term structure: Effective Annual YTM 1-year zero-coupon bond 5.2 % 2-year zero-coupon bond 5.3 3-year

zero-coupon bond 5.4 4-year zero-coupon bond 5.5 a. If you believe that the term structure next year will be the same as today’s, calculate the return on (i) the 1-year zero and (ii) the 4-year zero.
Business
1 answer:
Lisa [10]3 years ago
8 0

Answer:

Explanation:

a. If you believe that the term structure next year will be the same as today’s, calculate the return on (i) the 1-year zero and (ii) the 4-year zero.

b. Which bond provides a greater expected 1-year return? O 1-year zero-coupon bond O 4-year zero-coupon bond

The return on one year bond is = 5.2%

The price of 4 year bond today

=\frac{ 1000}{ (1.055)^4}

Price of 4 year bond today = 807.22

If yield curves is unchanged, the bond will have 3-year maturity and price will be

=\frac{  1000}{(1.054)^3}

If yield curves is unchanged, the bond will have 3-year maturity and price will be = 854.04

Return

=\frac{ (854.04 - 807.22)}{807.22}

Return = 5.8%

The longer term bond has given the higher return in this case at it's YTM fell during the holding period(4 -year)

You might be interested in
A team member had an affair with the team
mr_godi [17]

Answer:

Intervene and implement anti-fraternization policies if that's possible and legal. Motivate your team and improve communication as soon as

Explanation:

Before things get out of hand actions must be taken and it should be made clear favoritism is not allowed in the organization.

It would also be helpful if the team leader and team members were put into different teams as then the other members will not feel any sort of unbiased behavior towards themselves.

Please take into consideration the feelings of the involved parties as well. It's hard for people to do their best when they are unhappy or unmotivated.

Make sure to motivate your team as much as you can. A well-motivated team is a key to success. Listen to What People Are Not Saying, give Positive Feedback.  Disagree without being disagreeable.

It would be be awkward for the team to freely communicate as before so please try to be an icebreaker. Let them know they are here for a common goal and they need each other to excel at it.

8 0
4 years ago
The____________problem occurs when people fail to join a group because they can get the benefits the group offers without contri
QveST [7]
D. Group coordination
7 0
4 years ago
How can a job (or occupation) impact your life?​
Vinil7 [7]

Answer: You can try to leave work at work, but the thought of what you went through, or what you have to go through the next day, will affect your home life. As those thoughts enter your mind, you will feel your stress level start to rise.

Explanation:

8 0
3 years ago
Read 2 more answers
Donna entered into an oral contract with Ava to purchase a house from Ava, with $500 per month payments for the next 10 years. D
Crank

Answer:

Oral contracts regarding the sale of real property are enforceable under the Statute of Frauds.

Explanation:

Another thing that supports Donna's case is that she spent money, time and possibly others resources remodeling the house because she relied on the validity of the oral contract.

4 0
3 years ago
The lower a firm's inventory turnover, the longer it takes the firm to collect payment on its sales. a. faster the firm collects
Doss [256]

Answer:

The answer is C. longer inventory sits on the firm's shelves

Explanation:

The Inventory turnover is the number of times inventory is sold or used during a given period of time.

The formula is:

cost of goods sold/average inventory.

A lower inventory turnover means weak sales(declining sales) and excess inventory remaining in the warehouse while a higher inventory turnover means it is taking a firm short time to sell its goods(inventory)

4 0
3 years ago
Other questions:
  • You put up $40 at the beginning of the year for an investment. The value of the investment grows 5% and you earn a dividend of $
    14·1 answer
  • ABC Ltd (ABC) engaged the accounting firm of Ace & King to perform its annual audit. Ace amp; King performed the audit in a
    11·1 answer
  • The human resource (HR) department of Wardund, an event management company, sent emails to all the employees of the firm, inviti
    14·1 answer
  • Suppose 30% of business majors major in accounting. You take a random sample of 3 business majors. Answer questions 39 and 40: W
    7·1 answer
  • Kangaroo Autos is offering free credit on a new $10,000 car. You pay $1,000 down and then $300 a month for the next 30 months. T
    13·2 answers
  • Investment advisors at your local bank branch office
    5·1 answer
  • The primary goal of financial management is to:
    15·1 answer
  • On the cost of goods manufactured schedule, the cost of goods manufactured agrees with the:________ a. total debits to Work in P
    14·1 answer
  • Halp! I need an answer right away<br> Thank you
    5·1 answer
  • Nipigon manufacturing has a cost of debt of 9 %, a cost of equity of 11%, and a cost of preferred stock of 10%. nipigon currentl
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!