Business, 14.05.2021 20:20, hectorgonzalejr333

Currently, the term structure is as follows: One-year bonds yield 9.50%, two- year zero-coupon bonds yield 10.50%, three-year and longer maturity zero- coupon bonds all yield 11.50%. You are choosing between one, two, and three- year maturity bonds all paying annual coupons of 10.50%. You strongly believe that at year-end the yield curve will be flat at 11.50%. a. Calculate the one year total rate of return for the three bonds. (Do not round intermediate calculations. Round your answers to 2 decimal places.) One Year Three Years Two Years % One year total rate of return % % Which bond you would buy?
1) one-year bond
2) two-year bond
3) three-year bond

Answers: 3

Show answers

Other questions on the subject: Business

Business, 22.06.2019 10:00, dtaylor7755

How has internet access changed and affected globalization from 2003 to 2013? a ten percent increase in internet access has had little effect on globalization. a twenty percent decrease in internet access has had little effect on globalization. a thirty percent increase in internet access has sped up globalization. a fifty percent decrease in internet access has slowed down globalization.

Answers: 1

continue

Business, 22.06.2019 21:10, kmacho9726

Krier industries has just completed its sales forecasts and its marketing department estimates that the company will sell 43,800 units during the upcoming year. in the past, management has maintained inventories of finished goods at approximately 3 months' sales. however, the estimated inventory at the start of the year of the budget period is only 7,300 units. sales occur evenly throughout the year. what is the estimated production level (units) for the first month of the upcoming budget year?

Answers: 3

continue

Business, 23.06.2019 02:00, mayalp

Here are the expected cash flows for three projects: cash flows (dollars) project year: 0 1 2 3 4 a − 6,100 + 1,275 + 1,275 + 3,550 0 b − 2,100 0 + 2,100 + 2,550 + 3,550 c − 6,100 + 1,275 + 1,275 + 3,550 + 5,550 a. what is the payback period on each of the projects? b. if you use a cutoff period of 2 years, which projects would you accept?

Answers: 2

continue

Business, 23.06.2019 07:50, erinolson07cats

Suppose for a consumer the marginal utility (mu) of bread is 20 utils and the mu of milk is 10 utils; the price of bread is $3 and the price of milk is $1. given this, a. more utility per dollar is gained from consuming bread than milk. b. more utility per dollar is gained from consuming milk than bread. c. the same amount of utility per dollar is gained from consuming milk as bread. d. the consumer is in consumer equilibrium.

Answers: 1

continue

Do you know the correct answer?

Currently, the term structure is as follows: One-year bonds yield 9.50%, two- year zero-coupon bonds...