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sleet_krkn [62]
2 years ago
5

Suppose 1-year Treasury bonds yield 4.00% while 2-year T-bonds yield 5.10%. Assuming the pure expectations theory is correct, an

d thus the maturity risk premium for T-bonds is zero, what is the yield on a 1-year T-bond expected to be one year from now
Business
1 answer:
Art [367]2 years ago
5 0

Answer:

6.212%

Explanation:

Data given in the question

One year treasury bond yield = 4%

Two year treasury bond yield = 5.10%

Maturity risk premium for treasury bond is zero

So, the expected one year treasury bond expected one year from now is

Let us assume the expected one year treasury bond be X

(1 + One year treasury bond yield) × (1 + X) = (1 + Two year treasury bond yield)^number of years

(1.04) × (1 + X) = (1.051)^2

So, (1+X) = 1.06212

So, X = 6.212%

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Business solutions's second-quarter 2018 fixed budget performance report for its computer furniture operations follows. the $159
xeze [42]

Answer:

Business Solutions

Second-quarter 2018

Fixed Budget Performance Report

                                                  Budgeted              Actual

Variable expenses for desks $104,720              $104,720*

Variable expenses for chairs,   $20,800             $20,800*

<u>Fixed expenses                       $34,000                $35,800</u>

<u>Total  Expenses                      $159,520               $ 156,320 </u>

*Suppose the actual variable expenses are the same as budgeted variable expenses.

Explanation:

The variable expenses depend on the number of units of chairs and desks produced where as the fixed expenses remain constant irrespective of the no of units of production.

Variable expenses are those expenses that vary directly with the number of units produced ( example more desks and more chairs will require more material).

4 0
2 years ago
Uber’s strategy has been to break these regulations, establishing its service first, and then fighting attempts by regulators to
aleksley [76]

Answer: No it is not.

Explanation:

Uber by first establishing itself and then fighting regulators leaves itself open to attack around the world. This is because the Regulators have the power to keep adjusting the laws that govern Uber if they feel that Uber has an unfair advantage or if it's existence is detrimental to the society. Uber has been accused many times of various infractions such as Tax Evasions and being a conduit through which crime can be committed because it did not conduct proper background checks.

Going back to the issue of taxes, if the regulators feel that Uber may be avoiding taxes, they could impose laws that either cause an increase in Uber prices or remove them from a location which can have a native influence on Uber's bottomline.

This approach is not good because regulators do not like being fought and will try to ascert dominance. It is simply not viable and this has been proven with Uber's many suspensions around the world.

8 0
2 years ago
when investors doubt the creditworthiness of a borrower, what should happen to the price and yield of a bond
denpristay [2]

Answer:

Prices go down, yield go up

Explanation:

As we know that there is an opposite relationship between the price of the bond and the yield that means if the creditworthiness comes in a doubt so it reduced the price of the bond and at the same time it increased the yield

So as per the given situation as the investor doubt the borrower creditworthiness so the price would fall and yield would go up

hence, the same is to be considered

7 0
2 years ago
Ron is 30 years old and is retiring at the age of 65. when he retires, he will need a monthly income of $1,270 for 10 years. if
Alika [10]

d.

Ron will not make his monthly goal of $1,270 and will need $741.68 to supplement his monthly income when he retires.

3 0
2 years ago
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A group of 72 people travel to the beach for a clean-up day. some of the people bring their own supplies (such as gloves, water,
ZanzabumX [31]
<span>To calculate the number of people for whom to provide supplies for (B) you need to subtract the number of people who brought their supplies (P) from the overall number of people (72). B=72-P</span>
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