Homework Answers
Real Risk Free Rate of Treasury Bond = 0.05 - 0.019 - 0.003
Real Risk Free Rate of Treasury Bond =2.80%
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16. 5-year Treasury bonds yield 5.0 % . The inflation premium (IP) is 1.9% , and...
5-year Treasury bonds yield 5.5%. The inflation premium (IP) is 1.9%, and the maturity risk premium...
5-year Treasury bonds yield 5.5%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year T-bonds is 0.4%. There is no liquidity premium on these bonds. What is the real risk-free rate, r*? a. 3.52% b. 2.59% c. 2.88% d. 3.20% e. 3.87%
5-year Treasury bonds yield 5.1%. The inflation premium (IP) is 1.9%, and the maturity risk premium...
5-year Treasury bonds yield 5.1%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free rate, r*? Select the correct answer. a. 2.65% b. 2.80% c. 2.50% d. 2.35% e. 2.20%
5 year treasury bonds yield 6.4%. The inflation premium (IP) is 1.9%, and the maturity risk...
5 year treasury bonds yield 6.4%. The inflation premium (IP) is 1.9%, and the maturity risk (MRP) on 5 year bonds is 0.4%. What is the real risk free rate, r*?
5-year Treasury bonds yield 5.3%. The inflation premium (IP) is 1.9%, and the maturity risk premium...
5-year Treasury bonds yield 5.3%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free rate, r*? (Provide your answer as a percentage)
5-year Treasury bonds yield 6.1%. The inflation premium (IP) is 1.9%, and the maturity risk premium...
5-year Treasury bonds yield 6.1%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year T-bonds is 0.4%. There is no liquidity premium on these bonds. What is the real risk-free rate, r*? a. 3.80% b. 3.42% c. 3.69% d. 4.45% e. 4.03%
5-year Treasury bonds yield 4.1%. The inflation premium (IP) is 1.9%, and the maturity risk premium...
5-year Treasury bonds yield 4.1%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free rate, r*? Select the correct answer. a. 1.32% b. 1.64% c. 1.48% d. 1.80% e. 1.96%
5-year Treasury bonds yield 3.8%. The inflation premium (IP) is 1.9%, and the maturity risk premium...
5-year Treasury bonds yield 3.8%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free rate, r*? Select the correct answer. a. 1.62% b. 1.50% c. 1.98% d. 1.74% e. 1.86%
4. Johnson Corporation has 5-year bonds. Inflation premium (IP) on a 5 year bond is 1.00x....
4. Johnson Corporation has 5-year bonds. Inflation premium (IP) on a 5 year bond is 1.00x. The real risk-free rate is r = 2.80%, the default risk premium for Johnson's bonds is DRP = 0.85% versus zero for T-bonds, the liquidity premium on Johnson's bonds is UP 1.25%, and the maturity risk premium for all bonds is found with the formula MRP = (t-1) * 0.1%, where t= number of years to maturity. What is the yield on Johnson Corporation's...
Higgins’ 5-year bonds yield 5.10% and 5-year T-bonds yield 4.40%. The real risk-free rate is r* = 2.5%, the inflation premium for 5-year bonds is IP = 1.50%, the liquidity premium for Higgins' bon...
Higgins’ 5-year bonds yield 5.10% and 5-year T-bonds yield 4.40%. The real risk-free rate is r* = 2.5%, the inflation premium for 5-year bonds is IP = 1.50%, the liquidity premium for Higgins' bonds is LP = 0.5% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t – 1) 0.1%, where t = number of years to maturity. What is the default risk premium (DRP) on Higgins' bonds?
6. Moore Corporation has 6-year bonds. Inflation premium (IP) on a 6year bond is 1.00%. The...
6. Moore Corporation has 6-year bonds. Inflation premium (IP) on a 6year bond is 1.00%. The real risk-free rate is r* = 2.80%, the default risk premium for Moore's bonds is DRP = 0.85% versus zero for T-bonds, the liquidity premium on Moore's bonds is LP= 1.20%, and the maturity risk premium for all bonds is found with the formula MRP = (t - 1) x 0.1%, where t = number of years to maturity. What is the yield on...
4. Johnson Corporation has 5-year bonds. Inflation premium (IP) on a 5 year bond is 1.00x. The real risk-free rate is r = 2.80%, the default risk premium for Johnson's bonds is DRP = 0.85% versus zero for T-bonds, the liquidity premium on Johnson's bonds is UP 1.25%, and the maturity risk premium for all bonds is found with the formula MRP = (t-1) * 0.1%, where t= number of years to maturity. What is the yield on Johnson Corporation's...
6. Moore Corporation has 6-year bonds. Inflation premium (IP) on a 6year bond is 1.00%. The real risk-free rate is r* = 2.80%, the default risk premium for Moore's bonds is DRP = 0.85% versus zero for T-bonds, the liquidity premium on Moore's bonds is LP= 1.20%, and the maturity risk premium for all bonds is found with the formula MRP = (t - 1) x 0.1%, where t = number of years to maturity. What is the yield on...
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