Select a 10- to 15-year time period (of your choosing) over the last 50 years. Then...
Select a 10- to 15-year time period (of your choosing) over the last 50 years. Then explain how the trends and changes of the federal funds rate and/or the discount rate have impacted short-term or long-term interest rates.
Homework Answers
Choosing last 10 years period from 2009 to 2019.
Federal funds rate have been historically low to 0.25% and have gradually risen to 2.25%. Fed funds rate is the rate at which banks borrow from central banks and inter banks lending rate.
As results short term interest rates decline as well which is rate at which direct deposits or commercial papers give to investors. The current long term interest rates from 2009 to 2019 has been from 0.95% to 3.15% since 70 to 90 basis points are used as spread between fed funds rate and long term interest rates.
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Select a 10- to 15-year time period (of your choosing) over the
last 50 years. Then...
In your discussion post, select a 10- to 15-year time period (of your choosing) over the...
In your discussion post, select a 10- to 15-year time period (of your choosing) over the last 50 years. Then explain how the trends and changes of the federal funds rate and/or the discount rate have impacted short-term or long-term interest rates. PLEASE DO THE TIME PERIOD OF THE 2000S
how the trends and changes of the federal funds rate and/or the discount rate have impacted...
how the trends and changes of the federal funds rate and/or the discount rate have impacted short-term or long-term interest rates for 2000-2010
4) (4 pts) Given the average return on the following Investments over the last 50 years:...
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K.I.L. Company has issued 100 million in bonds 8 years ago with a 15 year maturity...
K.I.L. Company has issued 100 million in bonds 8 years ago with
a 15 year maturity and a coupon rate of 11% pa. The bond issue
contains a call provision of 10%. If recalled the bond will take 30
days to recall. Underwriting costs for the new bond issue are two
million. Short term interest rates are at 6% and long term interest
rates are currently offered at 10%. K.I.L.'s tax rate is 40%.
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Biochemical Corp. requires $600,000 in financing over the next three years. The firm can borrow the funds for three years at 10.80 percent interest per year. The CEO decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.50 percent interest in the first year, 12.15 percent interest in the second year, and 8.25 percent interest in the third year. Assume interest is paid in full at the end of each year. a....
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4) (4 pts) Given the average return on the following Investments over the last 50 years: Large Company Stocks Long-term Corporate Bonds Long term Government Bonds US Treasury Bills Inflation 50 year average 50 year average = 6.2% 50 year average 5.7% 50 year average: 3.5% 50 year average: 2.2% 9.4% What was the average historical risk premium for Large Company Stocks over the last 50 years? 8 What was the average historical real rate of return for Large Company...
K.I.L. Company has issued 100 million in bonds 8 years ago with
a 15 year maturity and a coupon rate of 11% pa. The bond issue
contains a call provision of 10%. If recalled the bond will take 30
days to recall. Underwriting costs for the new bond issue are two
million. Short term interest rates are at 6% and long term interest
rates are currently offered at 10%. K.I.L.'s tax rate is 40%.
Should ABC refund the bond? Please...
Boatler Used Cadillac Co. requires $930,000 in financing over the next two years. The firm can borrow the funds for two years at 10 percent interest per year. Ms. Boatler decides to do forecasting and predicts that if she utilizes short-term financing instead, she will pay 6.75 percent interest in the first year and 11.55 percent interest in the second year. Assume interest is paid in full at the end of each year a. Determine the total two-year interest cost...
Biochemical Corp. requires $720,000 in financing over the next three years. The frm can borrow the funds for three years at 10.20 percent interest per year. The CEO decides to do a forecast and predicts that if she utilizes short term financing instead, she will pay 8.50 percent interest in the first year, 12.90 percent interest in the second year, and 9.75 percent interest in the third year. Assume interest is pald in full at the end of each year....
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