The expected real risk-free interest rate over the next year

Assignment Help Financial Management

Reference no: EM132064934

YOP, Inc has a 3-year outstanding bond with 13% yield. Investors expect to earn an average of 3% in real rate of return.

Inflatiom is expected to be 1.5%, 2.0% and 4% for the next 3 years. Its lack of popularity in the financial market requires it to pay 2.5% for its lack of liquidy, and its relatively short amount of time before maturity only requires a 1.5% maturity risk premium.

What is the expected real risk-free interest rate over the next 9 years?

Reference no: EM132064934

Questions Cloud

Write a method named reduce : Write a method named "reduce" that takes two positive integer arguments, call them "num" and "denom", treats them as the numerator

Calculate the bond price after the yield change occurs : YTM on Beka Company bonds is 7%. Yield changes to 10%. YTM on Ashley Corp bonds is 6%. Yield changes to 10%.

What is the npv for the project if yurdones required return : The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up."

Fast-track development programme : As part of your fast-track development programme you have been given a project to revitalise leadership in your organisation.

The expected real risk-free interest rate over the next year : YOP, Inc has a 3-year outstanding bond with 13% yield. Investors expect to earn an average of 3% in real rate of return.

What is the maximum capacity of system : Assuming that only large pizzas are sold at lunch, what is the maximum capacity of this system during the 2 hour lunch period?

Table of random numbers : Use a table of random numbers, or the random number button on a calculator, to simulate the operation of amachine for 12 months and hence

Marketing philosophy of commercial bank of ethiopia : 1. Assess the marketing philosophy of Commercial Bank of Ethiopia. Which of the philosophies discussed, do you think, is adopted by the bank.

Prepare a three-month cash budget : Sales were $770,000 in August and $790,000 in September. Prepare a three-month cash budget, including a schedule for cash collections and material payments

User Account

All Pages