User Account

All Pages

What is the liquidity premium for the third year

Assignment Help Finance Basics
Reference no: EM13284086

One year spot rate is 6%, 2nd year forward rate is 7.5% and 3rd year forward rate is 12.3%. Assume liquidity premium for the second year is 0.5% and three year fixed rate is 9%. What is the liquidity premium for the third year?

Reference no: EM13284086

Questions Cloud

What should be the nominal return : Default risk premium is 1.2%, liquidity premium is 0.8%, maturity risk premium is 2% and the minimum lending rate is 4%. Based on the above information, what should be the nominal return?
What is the bond duration : An annual payment bond with a $1,000 par has a 5% quoted coupon rate, a 6% promised ytm, and 6 years to maturity. What is the bond's duration?
Interest rates fluctuate in the economy over various cycles : Interest rates fluctuate in the economy over various cycles. When interest rates are low, organizations may decide to issue debt as the cost of debt is low. However, this is likely to happen only with financially strong organizations because inter..
What will be the total deposits in long run : The total reserves are $50 million and current reserve requirement is 7% reserve. If the Fed decreases reserve requirements by 1% then what will be the total deposits in long run?
What is the liquidity premium for the third year : One year spot rate is 6%, 2nd year forward rate is 7.5% and 3rd year forward rate is 12.3%. Assume liquidity premium for the second year is 0.5% and three year fixed rate is 9%. What is the liquidity premium for the third year?
Determine the sign and magnitude of the third charge : Identical point charges of +3.6 ?C are fixed to diagonally opposite corners of a square. Find the sign and magnitude of the third charge
What is the 2nd year forward rate by using unbiased : One year spot rate is 6% and 2 year fixed rate is 7.5%. What is the 2nd year forward rate by using unbiased expectations theory?
Ep1 written enquiry plan : Using structured paragraphs and correct APA referencing, respond to the questions below (font size 12, Times New Roman, indented paragraphs, single-line spacing). For the search strategies and source evaluation sections, complete the tables by supply..
Calculate magnitude of positive voltages at the fault : Phase 'A' of a three-phasee 4.16 kV ungrounded system is solidly grounded. For this fault, calculate the magnitude of the positive, negative, and zero sequence voltages at the fault.

Reviews

Write a Review

Finance Basics Questions & Answers

  Managing exchange rate risk

Assume China suddenly decided to change its mind. Overnight, instead of increasing its value China decided to devalue downwards the Yuan by 20% in order to increase the attractiveness of its exports.

  Redemption of stock

Company M has outstanding 400 shares of common stock of which A, B, C & D each own 100 shares or 25%. No stock is considered constructively owned by A, B, C or D under section 318.

  Are there any legal concerns here

You believe that since she was only on a limited term contract she cannot expect to be treatd like a more permanent employee and given all maternity benefits.

  Depreciate the equipment using straight-line method

SAC is planning the purchase of new equipment to manufacture specialty spark plugs. The new machine would allow the company to manufacture 100,000 additional spark plugs per year.

  Calculate the operating and cash cycles

Consider the following financial statement information for the Schwertzec Corporation:

  Calculate the expected dividend yield

Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return? Round your answer to two ..

  Retirement planning case

THE CASE - LEONARD AND ROSE DOMINO,  Retirement Planning Case assignment.  You must clearly state assumptions in your final report in your final report to the clients.   Use generic rates throughout your analysis and refer to the OMERS defined ben..

  Description of dividend payout

A company is evaluating its dividend policy. Selected data for the company are shown below. What are the company's options for raising the money needed for the capital budget?

  What is the hedge ratio of the put option

Consider a six month put option on a stock with a strike price of $32. The current stock price is $30 and over the next six months it is expected to rise to $36 or fall to $27. The risk free rate is 6%.

  Determination of functions

Which of the following are functions discuss and explain your reasoning for a, b, and c. Keep the definition of a function strongly in mind as you do this problem, it is not nearly as difficult as it may look.

  Calculation of margin

Phoenix Trader opens a brokerage account and purchases 600 shares of Widget Company at $50 per share. He borrows $6,000 from his broker to help pay for buy.

  What is the company fixed operating costs

A company reports that if it's sales are $80,000, EBIT = $8,000, net income = $2,400, DOL = 2.5, and DFL = 2.0(a) What is the company's fixed operating costs? (b) What will the company's net income be if sales turn out to be $88,000 rather than $8..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd