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
patriot [66]
3 years ago
10

One-year Treasury securities yield 4.25%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 6.9

%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield using a geometric average.
Business
1 answer:
8090 [49]3 years ago
7 0

Answer:

5.57%

Explanation:

Assuming that pure expectation theory holds, then the compounded returns of 1 year treasury security rate multiplied by the compounded return of 1 year security rate 1 year from now is equal to the compounded return of the 2 year treasury rate.

1 year treasury security rate = 4.25%

1 year treasury security rate 1 year from now = 6.9%

To solve, we have

1.0425 * 1.069 = (1 + x)²

1.1144 = (1 + x)², finding the square root of both sides

√1.1144 = 1 + x

1.0557 = 1 + x

x = 1.0557 - 1

x = 0.0557

Therefore, the yield today for 2 year treasury securities is 5.57%

You might be interested in
Suppose that signaling theory is correct. Harris Inc. is planning a large expansion and needs to raise new capital. If managemen
lara31 [8.8K]

Answer:

a)equity

Explanation:

From the question, we are informed about that how Harris Inc. is planning a large expansion and needs to raise new capital. If management thinks the firm’s stock is overvalued and its prospects are poor while investors are unaware of these opinions, In this case the management will want to raise capital using equity. In finance, equity can be regarded as when there is debts or liabilities associated to the ownership of assets .It can be visualize as the stake of shareholder in the firm which can be seen on balance sheet of the company .Equity is measured for accounting purposes by subtracting liabilities from the value of an asset. Equity can be calculated as substraction of total liabilities from total assets of the company , it's usefulness bid found in some key financial ratios like ROE.

8 0
3 years ago
Four companies were sued by customers for injuries sustained from faulty products. All four companies settled out of court for $
Anettt [7]

Answer:

d. A company with assets totaling $50 billion.

Explanation:

In order to calculate the material impact of the lawsuit on each company, we must divide the settlement by total assets. In this case, we do not need to do the math, we simply have to select which company has the most assets. The more assets a company has, the lesser the material impact of any unfavorable settlement.

4 0
3 years ago
The globalization of business and changing demographic trends will present organizations with a tremendously culturally diverse
cupoosta [38]

Answer:  Option A

     

Explanation: In simple words, globalization refers to the process under which the business organisations become able to operate their activities in more than one nation. Globalization has opened worldwide market gates for business organisations.

To operate business in a foreign country, entities must have to use some local resources like employees of the target country for gaining efficiency. This results in a problem of miscommunication or no communication in which the managers might not be able to exchange information will all the different departments leading to loss of potential synergies.

Thus, from the above we can conclude that the correct option is A.

8 0
3 years ago
_______________ is a cost-effective way that many companies outsource the production of goods, such as clothing, shoes, and cell
diamong [38]

Answer:

Correct option is (c)

Explanation:

In international market contract manufacturing is when one firm manufactures goods under another firm's label or brand. Under this type of manufacturing, a company seeks another company in a different country to manufacture goods for it. This is done as the it could be costly to manufacture goods in home country in terms of human resources and raw materials.

So, contract manufacturing, also called international outsourcing or international sub-contracting is a cost-effective way of manufacturing goods.

4 0
4 years ago
On November 1, 2021, Sandhill Co. places a new asset into service. The cost of the asset is $84000 with an estimated 10-year lif
Aneli [31]

Answer:

$7,200

Explanation:

According to the scenario, computation of the given data are as follows,

Total cost = $84,000

Salvage value = $12,000

Estimated life = 10 years

So, we can calculate depreciation expense by using following formula,

Depreciation yearly = (Total cost - Salvage value) ÷ Estimated life

= ($84,000 - $12,000) ÷ 10

= $72,000 ÷ 10

= $7,200

7 0
3 years ago
Other questions:
  • On January 1, 2004, Kay Inc. issued its 10% bonds in the face amount of $400,000, which mature on January 1, 2014. The bonds wer
    12·1 answer
  • Describe the target market for your company's product or service
    10·1 answer
  • Sonesta Farm Equipment Company sold equipment for cash. The income statement shows a loss on the sale of $9,000. The net book va
    7·1 answer
  • If an efficient quantity of soybeans are produced and sold in the US market, then the market price of soybeans will be equal to:
    5·1 answer
  • Bartran Company assembles ink cartridges. Each finished cartridge has three child items: a plastic case, a label and several oun
    15·1 answer
  • Brad buys a tablecloth from a department store. When he gets it home, he finds that the color does not go well in his dining roo
    10·1 answer
  • Explain time and space
    8·2 answers
  • Current Attempt in Progress
    12·1 answer
  • What is the meaning of market testing?
    13·2 answers
  • linear programming is a mathematical technique designed to help operations managers plan and make decisions necessary to allocat
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!