Reference no: EM131096117
Question 1: Using the most recent issue of the Wall Street Journal, review the yields for the following securities:
|
Type
|
Maturity
|
Yield
|
|
Treasury
|
10-year
|
-
|
|
Corporate: high quality
|
10-year
|
-
|
|
Corporate: medium quality
|
10-year
|
-
|
|
Municipal (tax-exempt)
|
10-year
|
-
|
A) If credit (default) risk is the only reason for the yield differentials, then what is the default risk premium on the corporate high-quality bonds? And on the medium quality bonds?
Question 2: At the beginning of 2009, the Market Place was concerned with interest rate levels and the possibility of inflation. Given the following information, determine if you agree that the FED had anything to be concerned about.
Current US Treasury Rates at a Glance
"Rates for US Treasury Bonds, Bills and Notes." as of 12/28/08
|
|
COUPON
|
MATURITY
DATE
|
CURRENT
YIELD
|
|
3-Month
|
0.000
|
03/26/2009
|
0.06
|
|
6-Month
|
0.000
|
06/25/2009
|
0.22
|
|
12-Month
|
0.000
|
12/17/2009
|
0.36
|
|
2-Year
|
0.875
|
12/31/2010
|
0.88
|
|
3-Year
|
1.125
|
12/15/2011
|
1.06
|
|
5-Year
|
1.500
|
12/31/2013
|
1.51
|
|
10-Year
|
3.750
|
11/15/2018
|
2.13
|
|
30-Year
|
4.500
|
05/15/2038
|
2.61
|
a. Calculate the annual forward rates for one year and two years from now.
b. Calculate the annual expected inflation rates for each of the current and next two years if the real rate is defined as 2%.
c. Discuss if the FED should have been concerned with inflation.
|
Studying the effects of various environmental pollutants
: a. How many factors are involved? How many levels are there for each factor? How many trials will be required for a single replicate of the experiment? Can a test for lack of fit be obtained?
|
|
Find carmen sandiego utility by maximizing
: (a) Find Carmen Sandiego's utility by maximizing the choice of domestic and foreigntravel. Find her utility consuming that bundle. (b) Suppose the price of domestic travel increases to P D = $300 per day. Find the newoptimal bundle at this price ..
|
|
Effects of the process variables on the yield of a chemical
: Reaction yield. A chemical engineer decided to employ a single replicate of a 26 factorial design to study the effects of the process variables on the yield of a chemical reaction.
|
|
Try to explain the principle of operation
: Look carefully around your home, automobile, or place of employment, and list all the measuring devices you find. For each, try to explain the principle of operation.
|
|
Calculate the annual forward rates for one year
: At the beginning of 2009, the Market Place was concerned with interest rate levels and the possibility of inflation. Calculate the annual forward rates for one year and two years from now
|
|
Explain in brief the signal transduction cascade by cyclic
: Explain in brief the signal transduction cascade by cyclic AMP, Phosphoinositide and calcium (Ca+), G-proteins, and membrane receptor tyrosine kinases. If one secondary messenger is absent, is it possible that the other messenger can take up the acti..
|
|
Why are baby boomers such a lucrative market
: How has the marketing research process been used -to understand how Baby Boomers shop and interact in stores? How have stores used marketing research findings to tai¬lor their stores and products to appeal to Baby Boomers?
|
|
Result of john deposit
: What is the maximum possible amount that the national money supply could increase as a result of John's deposit?
|
|
Well-defined geographic area of a city
: Assume there is a well-defined geographic area of a city. The area is composed exclusively of apartments and is populated by low-income residents. The people who live in the area tend to stay in that area because
|