Bond that has a relationship with the stock market

Assignment Help Financial Management

Reference no: EM13970864

There is a bond that has a relationship with the stock market, and it goes up(falls) 4%, if the S&P rises (falls) 10%. We know that the T bond rate is 3%, and the S&P has returned 11 % over the last 100 years. Compute the YTM of this bond.

Reference no: EM13970864

Questions Cloud

Systematic risk rather than diversifiable risk : Why, in an efficient capital market does the cost of capital depend on systematic risk rather than diversifiable risk? Explain your answer using an example from the text.

What is the maximum price per share that dunbar should offer : Dunbar LTC, a national nursing home chain is considering purchasing a smaller chain, Eastern Nursing homes. Dunbar's analysts project that the merger will result in free cash flows to equity holders with a present value of $72.52 million and they hav..

Calculate the dirty price of this transaction : On October 7, 2010, you purchase a SR10,000 T-note that matures on August 15, 2021 (settlement occurs two days after purchase). The coupon rate on the T-note is 4.375 percent and the current price quoted on the bond is 105:08 (or 105.25% of the face ..

Which trade theory do you think best explain trade flows : Which trade theory do you think best explain trade flows between the United States and China? Why? Do you think that China is pursuing an economic policy that can be characterized as neo-mercantilist?

Bond that has a relationship with the stock market : There is a bond that has a relationship with the stock market, and it goes up(falls) 4%, if the S&P rises (falls) 10%. We know that the T bond rate is 3%, and the S&P has returned 11 % over the last 100 years. Compute the YTM of this bond.

Selling your home yourself instead of hiring a realtor : Describe at least two (2) advantages and two (2) disadvantages of selling your home yourself instead of hiring a realtor.

Inconsistent with shareholder wealth maximization : It has been argued that shareholder wealth maximization is not a realistic normative goal for the firm, given the social responsibility activities that the firm is “expected” to engage in (such as contributing to the arts, education, etc.). Explain w..

What is the bonds yield to maturity at this point in time : Below are four bond problems that you must solve using a financial calculator, a spreadsheet, or an online financial tool. If using a calculator or an online financial tool, please communicate what information you are entering and what you are comput..

Suppose unit variable cost estimates are good : Project Parameters Capital Investment $1,675,000 Life 6 years Depreciation S/L to $0 Projected Unit Volume 91,000 Unit Variable Cost $21.40 Unit Price $35.95 Annual Fixed Costs $775,000 Tax Rate 35% Required Return 11% Questions 1. Suppose unit sales..

User Account

All Pages