1. If inflation is coercioneseeed to be proportionately poor, then concern reprimands procure conduce to be proportionately noble, other things held faithful.
A. True B. False
2. Samuel set-up two opportunities of cannonade A (reprimand of requite 2%, plummet hiatus 1%) and cannonade B (reprimand of requite 4%, plummet hiatus 8%). Cannonade B is emend than Cannonade A (hints: proportion each CV and then assimilate each other).
A. True B. False
3. The larger the plummet hiatus is, the poorer the presumption that developed requites procure be rest to coercioneseeed requites.
A. True B. False
4. If inflation is coercioneseeed to extension in the advenient and the ripeness endanger bounty (MRP) is superior than nothing, the Treasury association give-in flexion must be upward sloping.
A. True B. False
5. A 15-year association with a aspect esteem of $1,000 ordinaryly retails control $900. So, the association’s give-in to ripeness or discount reprimand is hither than its coupon reprimand.
A. True B. False
6. Demetrice Corporation has 5-year associations. Inflation bounty (IP) on a 5year association is 1.00%. The authentic endanger-free reprimand is r* = 2.80%, the lapse endanger bounty control Demetrice’s associations is DRP = 0.85% versus nothing control T-bonds, the liquidity bounty on Demetrice’s associations is LP = 1.20%, and the ripeness endanger bounty control perfect associations is set-up with the controlmula MRP = (t – 1) x 0.1%, where t = sum of years to ripeness . What is the give-in on Demetrice Corporation’s 6-year associations?
7. Brisby Inc.’s associations ordinaryly retail control $800 and enjoy a par esteem of $1,000. They reckless a $100 annual coupon and enjoy a 10-year ripeness, still they can be named in 5 years at $1,200. What is their Capital Gain Give-in (CGY)?
8. A 10-year, 5% semiannual coupon association retailing control $1,135.90 can be named in 4 years control $1,200 (hint: par esteem is $1,000). What is its give-in to ripeness (YTM)?
9. A 10-year, 5% semiannual coupon association retailing control $1,135.90 can be named in 4 years control $1,200 (hint: par esteem is $1,000). What s its ordinary give-in (CY)?
10. A 10-year, 10% semiannual coupon association retailing control $1,135.90 can be named in 4 years control $1,200 (hint: par esteem is $1,000). What is its give-in to cperfect (YTC)?
11. Albert Inc.’s associations ordinaryly retail control $1,000 and enjoy a par esteem of $1,000. They reckless a $100 annual coupon and enjoy a 20-year ripeness, still they can be named in 5 years at $1,200. What is their give-in to ripeness (YTM)?
12. Davis Inc.’s associations ordinaryly retail control $1,000 and enjoy a par esteem of $1,000. They reckless a $60 annual coupon and enjoy a 20-year ripeness, still they can be named in 5 years at $1,200. What is their Coercioneseeed Ordinary Give-in (CY)?
13. Glaspy Inc.’s associations ordinaryly retail control $1,000 and enjoy a par esteem of $1,000. They reckless a $60 annual coupon and enjoy a 20-year ripeness, still they can be named in 5 years at $1,200. What is their give-in to Cperfect (YTC)?
14. Yamoah’ Motors has a beta of 1.40, the T-bill reprimand is 3.00%, and the T-note reprimand is 7.0%. The annual requite on the hoard traffic during the elapsed 3 years was 15.00%, still investors coercionesee the annual advenient hoard traffic requite to be 10.00%. Domiciled on the SML, what is the firm’s required requite?
15. Suppose the concern reprimand (requite reprimand) on a 1-year T-association is 2.0% and that on a 2-year T-association is 3.0% and that on a 3-year T-association is 4%. Assuming the simple coercioneseeations plea is punish, what is the traffic’s controlecast control 2-year reprimands 1 year from now?
16. Johnson’s Corporation’s associations enjoy a 10-year ripeness, a 10.00% semiannual coupon, and a par esteem of $1,000. The going concern reprimand (rd) is 2.00%, domiciled on semiannual compounding. What is the association’s compensation?
17. If the simple coercioneseeations plea holds, what does the traffic coercionesee procure be the concern reprimand (expected requite reprimand) on one-year securities, three years from now? (1year ripeness give-in is 6.0%; 2year ripeness give-in is 6.1%; 3year ripeness give-in is 6.3%; 4year ripeness give-in is 6.3 %; 5year ripeness give-in is 6.3%)? (Hints: Draw the timeline and then proportion the concern reprimand (expected requite reprimand) on one-year securities, three years from now.)
18. What is the five features of the associations? Explain!!!
19. What are the indelicate micro factors which desire the plane of concern reprimands? Explain!!!
20. What are the macroeconomic factors which desire the plane of concern reprimands? Explain!!!
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