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
4vir4ik [10]
2 years ago
9

The yield on a one-year Treasury security is 4.2300%, and the two-year Treasury security has a 6.3450% 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.)
7.2275%
10.7987%
9.6933%
8.5029%

Recall that on a one-year Treasury security the yield is 4.2300% and 6.3450% 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.)
9.2285%
6.8809%
8.0952%
10.2809%

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%
5.46%
6.45%
7.10%
Business
1 answer:
maks197457 [2]2 years ago
4 0

Based on the yields given on the Treasury securities, the market estimate of the Treasury rates would be:

  • 8.5029%
  • 8.0952%
  • 6.45%

<h3>What is Market estimate for One-Year Treasury Rate in a year?</h3>

This can be found as:

= ( ( 1 + two year rate) ^ Number of years / ( 1 + one year rate) ) - 1

= ( (  1 + 6.3450%) ² / ( 1 + 4.23%) ) - 1

= 8.5029%

<h3>What is Market estimate of one year Treasury Rate given maturity premium?</h3>

This can be found as:

= ( ( 1 + two year rate - maturity premium) ^ Number of years / ( 1 + one year rate) ) - 1

= ( (  1 + 6.3450% - 0.2%) ² / ( 1 + 4.23%) ) - 1

= 8.0952%

<h3>What is the market’s estimate of the three-year Treasury rate in two years?</h3>

= ( ( 1 + five year rate) ^ Number of years / ( 1 + two year rate)^number of years) ^ ( 1 / period of Treasury yield) - 1

= ( (  1 + 6.20% ) ⁵ / ( 1 + 5.83%)² ) ¹/³ - 1

= 6.45%

Find out more on Treasury Yields at brainly.com/question/24553422.

You might be interested in
Why are medical related professions and human resources important​
strojnjashka [21]

Answer:

They Both deal with the Wellbeing of the Human Talent

Explanation:

While the medical profession deals with physical, and psychotherapy treatment of the human being and  the Human Resources function deals with the employee welfare at work place such as work conditions, training, harassments at work place, both these professions try to improve the wellbeing of the Human Talent.

6 0
3 years ago
A will that is completely handwritten dated and signed by the person making the will
Marta_Voda [28]
It's called a <u>holographic will</u>.
6 0
3 years ago
When evaluating a balance sheet, the two primary questions are ________?
Brilliant_brown [7]

In terms of evaluating balance sheet, the two primary questions that are being formulated are the following;

-          The assets are financially secure or stable

-          The firm has assets that are sufficient and are short term in means of having debts that are only short and temporary.

4 0
3 years ago
Which type of market
lana [24]

government i think correct me if im rwong l

3 0
2 years ago
On November 1 of year 0, Jaxon borrowed $50,000 from Bucksnort Savings and Loan for use in his business. In December, Jaxon paid
Stels [109]

Answer:

a. $750

b. $750

Explanation:

The first thing to do is calculate the monthly interest as follows:

Monthly interest = Total interest ÷ 12 = $4,500 ÷ 12 = $375

The rent for two months in year 0 (November and December) = $375 × 2 = $750.

Prepaid expenses (January to October of year 1) = $4,500 - $750 = $3,750.

Decision:

Prepaid expenses is not deductible under either cash accounting method or accrual accounting method for tax purposes.

Therefore, Jaxon can deduct only $750 two months (November and December) relevant for year 0 under both cash accounting method and accrual accounting method.

The prepaid expenses of $3,750 is not deductible in year 0 but can only be deducted in year 1.

4 0
3 years ago
Other questions:
  • Your inspection of a house's _______ relates to the condition of the roof.
    7·1 answer
  • The idea that individuals and organizations are accountable to a larger society is known as:_________
    12·1 answer
  • 9. Mackenzie PLC is considering expanding a production line. The new equipment for the line will cost $255,000. In addition, the
    12·1 answer
  • Law or policy that provides specific guidand for department of defense acquisition workforce in ref to ctip
    8·1 answer
  • Allen filed his 2019 tax return on May 15th, 2020, and underreported his gross income by 30 percent. Assuming Allen's underrepor
    11·1 answer
  • Helena is looking for an advisor who can help guide her as she invests. She also wants to reduce transaction and trading costs.
    11·1 answer
  • East Coast Cleaners borrows $20,000 for 120 days and pays $400 interest. What is the effective rate of interest if the loan is d
    8·1 answer
  • A firm's current profits are $400,000. These profits are expected to grow indefinitely at a constant annual rate of 4 percent. I
    15·1 answer
  • What is an important quality that promotion and marketing managers need to have?
    11·1 answer
  • during the cooling off period, underwriters would be allowed to do all of the following except a) take indications of interest.
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!