Assume that the treasury bond yield

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1. You plan on retiring in 30 years from now. One month after you retire you plan on withdrawing $10,000 per month from your retirement account for the remainder of your life for 30 years. You also plan on leaving your four grandchildren $10,000 each. If your retirement account offers 10% compounded monthly, how much must you save each month of your working life so that you can meet your goals?

A: $904.99

B: $504.99

C: $804.99

D: $704.99

E: $604.99

2. ?Assume that the Treasury bond yield today is 2 percentage points higher than it was one year ago. Also assume that the credit (default) risk premium of an A-rated bond declined by 0.4 percentage point since one year ago. A newly issued A-rated bond will likely offer a yield today that is ____ the yield that was offered on an A-rated bond issued one year ago.

a. ?greater than

b. ?equal to

c. ?less than

d. ?A or B are both common

Reference no: EM131972456

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