7. Forecasting interest rates Assume the current interest rate on a oneyear Treasury bond (1R1) is 5.50 percent, the current rate on a twoyear Treasury bond (1R2) is 5.95 percent, and the current rate on a threeyear Treasury bond (1R3)
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Math
The Garraty company has two bond issues outstanding. Both bonds pa $100 annual interest plus $1,000 at maturity. Bond L has a maturity of 15 years and Bond S a maturity of 1 year. A). What will be the value of each of these bonds when the going rate of

College Finance
1.A recent edition of The Wall Street Journal reported interest rates of 10.75 percent, 11.10 percent, 11.48 percent, and 11.75 percent for 3, 4, 5, and 6year Treasury security yields, respectively. According to the unbiased expectation theory of the

FINANCE
8. Suppose that the current oneyear rate (oneyear spot rate) and expected oneyear Tbill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1 = 5 percent, E(2r1) = 6 percent, E(3r1) = 7.5 percent E(4r1) = 6.85

FINANCE
3. Unbiased Expectations Theory Oneyear Treasury bills currently earn 5.50 percent. You expect that one year from now, oneyear Treasury bill rates will increase to 5.75 percent. If the unbiased expectations theory is correct, what should the current rate

Finance
A 12year bond has an annual coupon rate of 9%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 7%. Which of the following statements is CORRECT? (Points: 4) The bond is currently selling at a price below its

finance
1. Yest Corporation's bonds have a 15year maturity, a 7% semiannual coupon, and a par value of $1,000. The market interest rate (r) is 6%, based on semiannual compounding. What is the bond’s price? 2. A 20year, $1,000 par value bond has a 9% annual

finance
A thirty year US Treasury bond has a 4.0% interest rate.In contrast a ten year treasury bond has an interest rate of 3.7%. If inflation is expected to average 1.5% points over both the next ten years and thirty years, determine the maturity risk premium

Finance
Suppose the September CBOT Treasury bond futures contract has a quoted price of 8909. What is the implied annual interest rate inherent in this futures contract? Assume this contract is based on a 20 year Treasury bond with semiannual interest payments.

Math
A 10year bond with a 5% coupon and a 1million VND par value is currently priced at 821,000VND. a. If the current market interest rate is 8%. Should you buy the bond? Why or why not? b. Assuming you buy and hold this bond for 6 years. What price must you

Finance
Given her evaluation of current economic conditions, Ima Nutt believes there is a 20 percent probability of recession, a 50 percent chance of continued steady growth, and a 30 percent probability of inflationary growth. For each possibility, Ima has

Finance
Judy Johnson is choosing between investing in two Treasury securities that mature in five years and have par values of $1,000. One is a Treasury note paying an annual coupon of 5.06 percent. The other is a TIPS which pays 3 percent interest annually. a. If

FINANCE
5. Forecasting Interest Rates Assume the current interest rate on a oneyear Treasury bond (1R1) is 5.00 percent, the current rate on a twoyear Treasury bond (1R2) is 5.75 percent, and the current rate on a threeyear Treasury bond (1R3) is 6.25 percent.

Accounting
Go to Table 101 which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 11 percent to 8 percent: A. What is the bond price at 11%? B. What is the bond price at 8%? C. What would

Math
he current termstructure of spot interest rates for safe zerocoupon bonds is as follows: Maturity, in years Interest rate(r) 1 8% 2 10% 3 11% 4 12% 5 13% There is a safe bond B which has 4 years before maturity and pays a coupon of 12% at regular annual

Finance
Miller Corporation has a premium bond making semiannual payments. The bond pays an 8 percent coupon, has a YTM of 6 percent, and has 13 years to maturity. The Modigliani Company has a discount bond making semiannual payments. The bond pays a 6 percent

Need help by tonite Finance
3. Unbiased Expectations Theory Oneyear Treasury bills currently earn 5.50 percent. You expect that one year from now, oneyear Treasury bill rates will increase to 5.75 percent. If the unbiased expectations theory is correct, what should the current rate

Finance
the existing or current (spot) 1, 2, 3, and 4year zero coupon Treasury security rates were as follows: 1R1 = 0.30%, 1R2 = 0.90%, 1R3 = 1.30%, 1R4 = 1.45% Using the unbiased expectations theory, calculate the 1year forward rates on zero coupon Treasury

bond valuation
Bond valuation The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1,000 at maturity. Bondf L has a maturity of 15 years, and Bond S a maturity of 1 year. a. What will the value of each of these bonds when the

Finance
Interest rate premiums A 5year Treasury bond has a 5.2 percent yield. A 10year Treasury bond yields 6.4 percent, and a 10year corporate bond yields 8.4 percent. The market expects that inflation will average 2.5 percent over the next 10 years (IP10 _

fin
1. A financial institution has the following market value balance sheet structure: (LG 191) Assets Liabilities and Equity . Cash $ 1,000 Certificate of deposit $ 10,000 Bond 10,000 Equity 1,000 Total assets $11,000 Total liabilities and equity $ 11,000.

finance
On March 11, 20XX, the existing or current (spot) 1, 2, 3, and 4year zero coupon Treasury security rates were as follows: 1R1 = 0.40%, 1R2 = 1.00%, 1R3 = 1.40%, 1R4 = 1.55% Using the unbiased expectations theory, calculate the 1year forward rates on

statistics
Investment analysts generally believe the interest rate on bonds is inversely related to the prime interest rate for loans; that is bonds perform well when lending rates are down and perform poorly when interest rates are up. Can the bond rate be predicted

Need help by tonite FINANCE
2. Interest rates A twoyear Treasury security currently earns 5.25 percent. Over the next two years, the real interest rate is expected to be 3.00 percent per year and the inflation premium is expected to be 2.00 percent per year. What is the maturity

Math
Go to Table 101 which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 11 percent to 8 percent: A. What is the bond price at 11%? B. What is the bond price at 8%? C. What would

finance
12. A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eightyear Treasury bond has a yield of 8 percent. a. If inflation is expected to average 7 percent over the first four years, what is the

math
Question 1 Find the interest. All rates are annual interest rates. Principal $400 Rate 5% Time 1 year Incorrect answer A. $10 Correct answer B. $20 Incorrect answer C. $40 Incorrect answer D. $200Find the interest. All rates are annual interest rates.

Math... please help me
Please can you help me to solve and get the solution for these problems. how to get the solution please help me question: 1.Find the price of a 10% coupon bond with 10 years to maturity if interest rates: A) increase by 1% B) decrease by 1% C) increase by

Finance
Which of the following statements is CORRECT? a. Two bonds have the same maturity and the same coupon rate. However, one is callable and the other is not. The difference in prices between the bonds will be greater if the current market interest rate is

FINANCE
7. Forecasting interest rates Assume the current interest rate on a oneyear Treasury bond (1R1) is 5.50 percent, the current rate on a twoyear Treasury bond (1R2) is 5.95 percent, and the current rate on a threeyear Treasury bond (1R3) is 8.50 percent.

Finance
Answers for a 10 year us treasury bond has a 3.50 % interest rate, while a same maturity corporate bond has a 5.25 % interest rate. Real interest rates and inflation rate expectations would be for the two bonds. if default risk premium of 1.50 percentage

Finance
You purchased a $1,000 five percent coupon bond that matures in 10 years. How much would your bond be worth if interest rates fall to 4% the day after you purchase the bond? What would the bond be worth in one year if interest rates fell to 4% at that

Finance 200
The treasurer for Thornton Pipe and Steel Company wishes to use financial futures to hedge her interest rate exposure. She will sell five Treasury futures contracts at $105,000 per contract. It is July and the contracts must be closed out in December of

Stats
Question 3 Investment analysts generally believe the interest rate on bonds is inversely related to the prime interest rate for loans; that is, bonds perform well when lending rates are down and perform poorly when interest rates are up. Can the bond rate

accounting
Assume Venture Healthcare sold bonds that have a tenyear maturity, a 12 percent coupon rate with annual payments, and a $1,000 par value. a. Suppose that two years after the bonds were issued, the required interest rate fell to 7 percent. What would be

economics
What is the inflation rate? If GDP deflator rises from 100 in year 1 to 107 in year 2 and 115 in year 3, what will be the inflation rate between year 1 and year 2 and between year 2 and year 3? Also, if the nominal interest rate is 9 % pa during all years,

Math
The values of outstanding bonds change whenever the going rate of interest changes. In general, shortterm interest rates are more volatile than longterm interest rates. Therefore, shortterm bond prices are more sensitive to interest rate changes than

social studies
1)An interest rate is a special type of? a. loan b. price c. bank d. service 2) How does a compound interest rate differ from a simple interest rate? a. Compound interest rates pay more interest over time b. Compound interest rates are calculated only once

accounting
Heww Inc., issued a $50,000, 10 year bond with a stated interest rate of 6%. Assume interest payments are made semiannually. What is the selling price of the bond if the market rate of interest is 5%? (Round to the nearest dollar.)

Finance
midland chemcial is negotating a loan from manhattan bank and trust. the small chemical company needs to borrow 500,000. the bank offers a rate of 81/4 percent with a 20 percent compensating balance requirement, or as an alternative, 93/4 percent with

Finance (Coupon Bonds)
I am having a hard time starting on how to calculate this please. You purchased a $1,000 five percent coupon bond that matures in 10 years. How much would your bond be worth if interest rates fall to 4% the day after you purchase the bond? What would the

Social Studies
I was wondering if I could check my answers with someone. I'm a bit confused with interest. I put stars next to the answers I chose. Thank you. An interest rate is a special type of (1 point) loan. **price. bank. service. 2. How does a compound interest

Social Studies
An interest rate is a special type of (1 point) loan. **price. bank. service. 2. How does a compound interest rate differ from a simple interest rate? (1 point) ***Compound interest rates pay more interest over time. Compound interest rates are calculated

finance
A treasury note with a maturity of four years carries a nominal rate of interest of 10%. In contrast, an eight year treasury bond has a yeild of 8%. A. If inflation is expected to average 7% over the first four years,what is the expected real rate of

business finance
value of outstanding bond changes whenever the going rate of interest changes in general short term interest rates are more volatile than long term interest rates. therefore short term bond prices are more sensitive to interest rate changes than are long

Finance
First Inc. is facing a liquidity problem and needs to issue a perpetual bond that is callable only at the end of year 2. The call price is $1,000 (face value) plus an additional coupon payment. The current interest rate is 8% per year. At the end of each

Finance
Thr rate of return you would get if you bought a bond and held it to its maturity date is called the bond's yield to maturity. If interest rates in the economy rise after a bond has been issued, what will happen to the bond's price and to its YTM? Does the

Finance
"The value of outstanding bonds change whenever the going rate of interest changes. In general, shortterm interest rates are more volatile than longterm interest rates. Therefore, shortterm bond prices are more sensitive to interest rate changes than

finance
The Wall Street Journal reports that the current rate on 8year Treasury bonds is 5.85 percent, on 15year Treasury bonds is 6.25 percent, and on a 15year corporate bond issued by MHM Corp. is 7.35 percent. Assume that the maturity risk premium is zero.

Finance, Math
The oneyear and twoyear riskfree rates (yields) are 1% and 1.025%, respectively. Our model of the term structure says that one year from now the oneyear interest rate will be one of the following two values: 0.01 or 0.01*u, where u is the up factor.

Finance
Dahler Corporation has just issued a bond with a maturity of 20 years, coupon rate of 10.25%, and a market price of $1330.25. Dahler makes semiannual coupon payments. a) what is the YTM expressed as a quoted rate based on semiannual compounding? And what

Econ
The 1year interest rate on Swiss francs is 5 percent and the dollar interest rate is 8 percent. (A) if the current $/SF spot rate is $0.60, what would you expect the spot rate to be in 1 year. (B) Suppose US policy changes and leads to an expected future

Economics
Now lets consider a different type of government bond, a tenyear inflation indexed bond. Payments on this bond are adjusted for inflation based on the CPI. If inflation rises by five percent, interest payments on this bond will rise by five percent.

Finance Math
Tristan Sandino was given a 20year bond when he was twelve years old and would like to sell it on his 21st birthday. The bond has a coupon rate of 4.8% and was purchased for $580. Tristan receives interest checks every six months. If Tristan sells the

Math
Bond : Face Value = 100,000 State Rate = 9% Semiannual Payments Term = 3years Market Rate of 12% Amortize the bond to determine: Year 1 Interest Expense End of Year 1 carrying value. My Answers: Year 1 Interest Expense = 5,621.05 End of Year 1 carrying

bond valuation
Bond valuation The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1,000 at maturity. Bondf L has a maturity of 15 years, and Bond S a maturity of 1 year. a. What will the value of each of these bonds when the

Finance
A dealer in government securities currently holds $875 million in 10year Treasury bonds and $1,410 million in 6month Treasury bills. Current yields on the Tbonds average 7.15 percent while 6month Tbill yields average 3.38 percent. The dealer is

Finance
4.A thirty year US treasury bond has a 4.0 percent interest rate.In contrast, a ten year Treasury bond has an interest rate of 2.5 percent. A maturity risk premium is estimated to be 0.2 percentage points for the longer maturity bond. Investors expect

Finance
A thirtyyear Treasury bond has a 4.0 percent interest rate. In contrast, a tenyear Treasury bond has an interest rate of 2.5 percent. A maturity risk premium is estimated to be 0.2 percentage points for the longer maturity bond. Investors expect

Finance
What is the value of 15year corporate bonds, with a coupon rate of 9%, if current interest rates on similar bonds is 8%? How much would the value change if interest rates increased to 10%? Under what conditions will this bond trade at par (face value)?

finance
A small chemicalcompany is negotiatimg a loan from Manhatten Bank and Trust. The small chemical company needs to borrow $500,000. The bank offers a rate of 8 1/4 % with a 20% compensating balance, or as an alternative 9 3/4% with additional fees of $5,500

Principles of Finance
.A thirty year US treasury bond has a 4.0 percent interest rate.In contrast, a ten year Treasury bond has an interest rate of 2.5 percent. A maturity risk premium is estimated to be 0.2 percentage points for the longer maturity bond. Investors expect

Advanced Finance
6. (TCO F) Suppose the December CBOT Treasury bond futures contract has a quoted price of 8007. What is the implied annual interest rate inherent in the futures contract? Assume this contract is based on a 20year Treasury bond with semiannual interest

Finance
2. You are now considering adding a corporate bond to your investment portfolio. The bond was issued last year to have 10 years to maturity (so it has 9 years remaining to maturity from today) The bond has an 8% coupon, and was sold at par ($1,000) when it

FINANCE
6. On May 23, 2014, the existing or current (spot) oneyear, twoyear, threeyear, and fouryear zerocoupon Treasury security rates were as follows: 1R1 = 4.55 percent, 1R2 = 4.75 percent, 1R3 = 5.25 percent, 1R4 = 5.95 percent Using the unbiased

fanince
) A thirtyyear U.S Treasury bond has a 4.0 percent interest rate. In Contrast, a tenyear Treasury bond has an interest rate of 2.5 percent. A maturity risk premium is estimated to be 0.2 percentage points for the Longer maturity bond. Investors expect

Social studies
How die a compound interest rate differ from a simple interest rate? Compound interest rates pay more interest over time Compound interest rates are calculated only once a year Compound interest rates ideally lower than simple interest rates•• Compound

Foundations of Financial Management
here is the problem The small chemical company needs to borrow $500,000. The bank offers a rate of 8 1/4 percent with a 20 percent compensating balance requirement, or as an alternative, 9 3/4 percent with additional fees of $5,500 to cover services the

college
I purchased a $1,000 five percent coupon bond that matures in 10 years. How much would my bond be worth if interest rates fall to 4% the day after I purchase the bond? What would the bond be worth in one year if interest rates fell to 4% at that point?

accounting
You purchased a $1,000 five percent coupon bond that matures in 10 years. How much would your bond be worth if interest rates fall to 4% the day after you purchase the bond? What would the bond be worth in one year if interest rates fell to 4% at that

UWI
Digicel Jamaica has raised financing by issuing 25year bonds on January 1, 2009. They mature on December 31, 2033 and have a par value of $1,000 and a coupon rate of 8%. Coupon payments are made semiannually. a)What is interest rate risk? Which bond has

FINANCE
2. Interest rates A twoyear Treasury security currently earns 5.25 percent. Over the next two years, the real interest rate is expected to be 3.00 percent per year and the inflation premium is expected to be 2.00 percent per year. What is the maturity

Finance
The Carter Company's bond mature in 10 years have a par value of 1,000 and an annual coupon payment of $80. The market interest rate for the bond is 9%. What is the price of these bonds The coupon rate on the bond, (interest/principal at maturity) = 8%

Statistics
Mortgage Rates In 2001, the mean contract interest rate for a conventional 30year first loan for the purchase of a singlefamily home was 6.3 percent, according to the U.S. Federal Housing Board.A real estate agent believes that interest rates are lower

Finance
A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eightyear Treasury bond has a yield of 8 percent. a. If inflation is expected to average 7 percent over the first four years, what is the

business finance
what is the expected real interest rate on a ten year 2.5% u s treasury bond

Finance
A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eightyear Treasury bond has a yield of 8 percent. A. If inflation is expected to average 7 percent over the first four years, what is the

finance
12. A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eightyear Treasury bond has a yield of 8 percent. a. If inflation is expected to average 7 percent over the first four years, what is the

finance
(Bond valuation) Eagle Ventures has a bond issue outstanding with an annual coupon rate of 7 percent and 4 years remaining until maturity. The par value of the bond is $1,000. (a) Determine the current value of the bond if present market conditions justify

finance
Given the following table: Type of Security Interest Rate 5Year Treasury Note 5% 5Year Corporate Bond (High quality) 6% 5Year Corporate Bond (Low quality) 8% Calculate the default risk premium (DRP) on the Corporate bonds.

MS.SUE PLS HELP ME
Please can you help me to solve and get the solution for these problems. how to get the solution please help me for my homework. question: 1.Find the price of a 10% coupon bond with 10 years to maturity if interest rates: A) increase by 1% B) decrease by

math..please i need your help
Please can you help me to solve and get the solution for these problems. how to get the solution please help me for my homework. question: 1.Find the price of a 10% coupon bond with 10 years to maturity if interest rates: A) increase by 1% B) decrease by

Economics  Bonds
The Garraty company has two bond issues outstanding. Both bonds pa $100 annual interest plus $1,000 at maturity. Bond L has a maturity of 15 years and Bond S a maturity of 1 year. A). What will be the value of each of these bonds when the going rate of

Finance
Heinz Corporation bonds carry a coupon of 8% and will mature in 5 years at $1,000. Newly issued 5year bonds with similar characteristics are yielding 4%. Calculate today's market price of the Heinz bond. Compute your answer, submit all your work, then

Finance
Heinz Corporation bonds carry a coupon of 8% and will mature in 5 years at $1,000. Newly issued 5year bonds with similar characteristics are yielding 4%. Calculate today's market price of the Heinz bond. Compute your answer, submit all your work, then

Finance
P5. A thirty U.S. Treasury bond has a 4.0 percent interest rate. In contrast, a tenyear Treasury bond has an interest rate of 2.5 percent. A maturity risk premium is estimated to be .2 percentage points for the longer maturity bond. Investors expect

finance
A thirtyyear U.S. Treasury bond has a 4.0 percent interest rate. In contrast, a tenyear treasury bond has an interest rate of 3.7 percent. If inflation is expected to average 1.5 percentage points over both the next ten years and thirty years, determine

Finance
A thirtyyear U.S. Treasury bond has a 4.0 percent interest rate. In contrast, a tenyear Treasury bond has an interest rate of 3.7 percent. If inflation is expected to average 1.5 percentage points over both the next ten years and thirty years, determine

Math
1. Jill has a bond with a face value of $1,000. The bond has a coupon rate of 6%. Find her current yield if the market price of the bond is $1,027. 2. Calculate the annual interest you receive on a $1000 Treasury bond with a current yield of 1.5% that is

Math
Termstructure of interest rates and Arbitrage The current termstructure of spot interest rates for safe zerocoupon bonds is as follows: Maturity, in years Interest rate (r) 1 8% 2 10% 3 11% 4 12% 5 13% There is a safe bond B which has 4 years before

help
The interest rate on a second mortgage was5 7/8 % last month. This month the interest rate is 7 3/2 %. How many percentage points has the interest rate increased? Are you sure you mean 7 3/2% ? No lender would write an intereest rate that way. Perhaps you

Economics
Isabella buys a $1,000 bond that matures in 10 years (that is, she lends $1,000 to the U.S. Treasury for 10 years). The bond pays her $50 every year for 10 years. When the bond matures at year 10, she will receive her $1,000 back as well as her last

economics
The current termstructure of spot interest rates for safe zerocoupon bonds is as follows: Maturity, in years Interest rate(r) 1 8% 2 10% 3 11% 4 12% 5 13% There is a safe bond B which has 4 years before maturity and pays a coupon of 12% at regular annual

Capital Markets
You work for an underwriter. The underwriter asks you to ¡§strip¡¨ a portfolio of treasury bond. The treasury bonds in question are all identical, they have 5 years to maturity, pay an annual coupon of 7.25% per year, payable annually, and they are

mathematicalmodel
The oneyear and twoyear riskfree rates (yields) are 1% and 1.025%, respectively. Our model of the term structure says that one year from now the oneyear interest rate will be one of the following two values: 0.01 or 0.01*u, where u is the up factor.

COM155
Write two paragraphs about how interest rates affect our purchasing decisions. High interest rates make us stop and think, do we need this item? Is it a necessity? When interest rates are high people tend to finance things less. Why pay a lot in interest

Math
Bond Yields. An AT&T bond has 10 years until maturity, a coupon rate of 8 percent, and sells for $1,100. a. What is the current yield on the bond? b. What is the yield to maturity? a) The current yield is $80/1100 = 7.27% b) The yield to maturity (YTM) is

Finance
Interest rates on 2year Treasury securities are currently 5.00%, while 5year Treasury securities yield 10.00%. If the pure expectations theory is correct, what does the market believe that 3year securities will be yielding 2 years from now?

Hogan
Please help identify the topic subject in each paragraph: Interest rates affect our purchasing decision in a two different ways. A lower interest rate is obviously preferred to minimize expenditure being either long or short term. A lower interest rate is

finance
Usha Manufacturing Co. has a bond of $1000 par value outstanding. It pays interest annually and carries an annual coupon rate of 8%. Bonds are issued 2 years ago & due in 10 years. If the market rate of return on bonds is 7%. Required: a. What is the

Finance
Bob bought an 8.5% annual coupon bond at par. One year later, he sold the bond at a quoted price of 98. During the year, market interest rates rose and inflation was 3%. What real rate of return did Bob earn on this investment?