Pure expectations theory The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can
be used to estimate future short-term interest rates. Based on the pure expectations theory, is the following statement true or false? The pure expectations theory assumes that a one-year bond purchased today will have the same return as a one-year bond purchased five years from now. False True The yield on a one-year Treasury security is 5.8400%, and the two-year Treasury security has a 7.0080% yield. Assuming that the pure expectations theory is correct, what is the market’s estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.) 10.3999% 6.9606% 8.1889% 9.3353% Recall that on a one-year Treasury security the yield is 5.8400% and 7.0080% on a two-year Treasury security. Suppose the one-year security does not have a maturity risk premium, but the two-year security does and it is 0.2%. What is the market’s estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.) 8.8748% 6.6172% 7.7849% 9.8868% Suppose the yield on a two-year Treasury security is 5.83%, and the yield on a five-year Treasury security is 6.20%. Assuming that the pure expectations theory is correct, what is the market’s estimate of the three-year Treasury rate two years from now? (Note: Do not round your intermediate calculations.) 6.53% 6.45% 5.46% 6.69%
Forward rates represent the expected future rate. This theory is known as pure expectation theory. The bond purchase today will not have the discount factor affect whereas the bond purchased five years from now will have different return from today. The five year value will need to be discounted in order to find the return on todays date.
Well if you dont pay for it you will loose your insurance. Nothing would happen instantly but if you are pulled over on the road regardless of the reason (even if someone did something to you) you will be in a looot of trouble. Like a lot
d. A manufacturing company will normally have raw materials, work in process, and merchandise inventory as inventory account classifications.
Explanation:
Normally a manufacturing company has various inventors such as raw material, work in progress and finished goods and the inventories are goods that held up in stocks for the ultimate goal of resale, another type of inventories include transit inventory, buffer inventory and cyclic inventory.
Merchandise inventory is a finished good that is taken for sale by retail or wholesale. The finished goods for the sale by manufactures are generally called as finished goods inventory.
