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1. describe the difference between yield curve and risk structure
2. describe the difference between the three theories of term structure of interest rate: Expectation Theory, Liquidity Premium Theory, Market Segmentation Theory
Basic Finance, Finance
Question - Yield to maturity Moe's Inc. has bonds outstanding with a par value of $1000 and 10 years to maturity. These bonds pay a coupon of $45 every six months. Current market conditions are such that the bond sells f ...
Question - If the future value of an ordinary, 5-year annuity is $6,000 and interest rates are 8 percent, what's the future value of the same annuity due?
We have the following investments in our portfolio: Investment Amount Expected Return Beta A Stock $2,000 ...
Question - Gamma Energy is an oil producing company that owns an oil field from which it can deliver 10 mln barrels of oil per year for the next four years. The current oil price is USD 75 per barrel. Extraction costs ar ...
Borel wants to be a millionaire when he retires in 40 years. How much does he have to save each month if he can earn a 10% annual return? (round off all answers to 2 decimal places)
What is the present value of a security that will pay $9,000 in 20 years if securities of equal risk pay 12% annually? Round your answer to the nearest cent
Shocking Co. is expected to maintain a constant 7 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 4.2 percent, what is the required return on the power company's stock?
Question - Analyze and evaluate sensitivity analysis for different financial models, including the Yield Curve and its usefulness in predicting recessions. Did the Yield Curve from 2004 through 2007 predict the Great Rec ...
Question - We bought a stock for $45.85 four years ago and we can sell it for $59.13 today. The stock does not pay dividends. What annual rate of return have we earned?
A mining company wishes to start up a new small gold mine. The initial cost will be $5m and it is expected to extract $3m a year in gold with incurring only $1.5m a year in costs for 5 years. Assume revenue and costs are ...
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