Related to the term structure of interest rates

Assignment Help Financial Management

Reference no: EM131510768

Which one of the following risk-premiums, by definition, is not related to the term structure of interest rates (i.e. shape of the yield curve)?

Default risk.

Inflation.

Neither inflation or interest-rate risk.

Interest rate risk.

Liquidity.

Reference no: EM131510768

Questions Cloud

Calculate the cost of common stock and preferred stock : Domelan Van Lines is interested in measuring its cost of capital. Calculated the cost of preferred stock. Calculate the cost of common stock.

Decrease across the board on all equity securities : Bob is an optomist and he expects the required rate of return to decrease across the board on all equity securities (stocks),

Forecasts that inflation is going to increase : Inflation was 2% last year. Thomas forecasts that inflation is going to increase to 4% this year.

The bonds have more interest rate risk : At issue these bonds were rated BBB, but today they are rated AAA. The bonds have more interest rate risk than when they were issued.

Related to the term structure of interest rates : Which one of the following risk-premiums, by definition, is not related to the term structure of interest rates (i.e. shape of the yield curve)?

Make an accept-reject decision based on the results in part : Compute the values of i*’s for this project. Make an accept-reject decision based on the results in part

Treasury debt is lower than yield on five-year treasury debt : You observe that the yield on one-year U.S. Treasury debt is lower than the yield on five-year U.S. Treasury debt.

Zero-coupon bond to finance a new sausage factory : Three years ago Johnsonville Inc. issued a coupon bond and a zero-coupon bond to finance a new sausage factory.

Why do so many analysts disregard equity income : When it comes to restatements, why do so many analysts disregard Equity Income?

User Account

All Pages