Homework Answers
Please give ratings it will be appreciable thank you
When the difference between the yield on short term bland and longe term bond decrease yield curve becomes late
So when the expectation of short-run interest rate rises (the difference of yield between short term bond and long term bond decreases ) than the yield curve becomes flat
so option A is correct
Add Answer to:
A flat yield curve occurs when investors have which expectation of future interest rates? A. They...
What is the shape of the yield curve given in the following term structure? What expectations...
What is the shape of the yield curve given in the following term structure? What expectations are investors likely to have about future interest rates? Term 1 year 2 years 3 years 5 years 7 years 10 years 20 years Rate (EAR, %) 1.97 2.41 2.74 3.34 3.78 4.14 4.96 What is the shape of the yield curve given the term structure? (Select the best choice below.) A. The yield curve is an inverted yield curve (decreasing). B. The yield...
- - higher interes in the long-term where My Pe Theory Market Netto They The Curve...
- - higher interes in the long-term where My Pe Theory Market Netto They The Curve Theory None of the above fequitymarkets are strong form Micient Investors should chose quity portfolios randomly Investors should put money only in professionally managed equity portfolios Investors should not invest in equity securities Investors should invest in stocks with high P raties Investors should form portfolios that are well diversified and appropriate for their own levels of risk tolerance TO To apply the Dividend...
Using the Yield Curve to Estimate Future Interest Rates You can calculate the yield curve, given...
Using the Yield Curve to Estimate Future Interest Rates You can calculate the yield curve, given inflation and maturity-related risks. Looking at the yield curve you can use the information embedded in it to estimate the market's expectations regarding future inflation, risk, and short-term interest rates. The pure expectations shape of the yield curve depends on investors' expectations about future interest rates. The theory assumes that bond traders establish bond prices and interest rates strictly on the basis of expectations...
Yield curve is chart of interest rates (yield) usually with maturities of 1 month to 30...
Yield curve is chart of interest rates (yield) usually with maturities of 1 month to 30 years. The interest rates depicted in the yield curve are of which type? Select one: O a. Annualized rates O b. Forward rates O c. Holding rates O d. Spot rates The relationship between a bond's price (present value) and bond's yield to maturity is inversely proportional; L.e. one goes up when the other goes down and vice versa. Because of that relationship, if...
If the expectation of short-term interest rate remains the same in the future, the expectations theory...
If the expectation of short-term interest rate remains the same in the future, the expectations theory predicts that the yield curve will be while the liquidity preference theory predicts that the yield curve will be_ A B. C. D. Flat; flat Upward sloping; upward sloping Flat; upward sloping Upward sloping; flat The market capitalization rate on the stock of Aberdeen Wholesale Company is 12%. Its expected ROE is 10% am dots expected EPS is $3.00. if the firm's plow-back ratio...
17) The IS curve will shift when which of the following occurs? A) a reduction in...
17) The IS curve will shift when which of the following occurs? A) a reduction in output. C) a reduction in consumersʹ confidence. B) a reduction in interest rate. D) a reduction in money supply. 18) When a liquidity trap situation exists, the most appropriate policy to increase output would be A) a central bank purchase of bonds. B) an increase in government purchase. C) a central bank sale of bonds. D) none of the above 19) Which of the...
Which of the following statements about the term structure of interest rates is incorrect? A. According...
Which of the following statements about the term structure of interest rates is incorrect? A. According to the Liquidity Preference Theory, long-term interest rates are usually higher than short-term interest rates. B. The Market Segmentation Theory posits that bonds of different maturities are traded by different investors and their prices/yields are determined separately. C. The Pure Expectations Theory asserts that the yield curve is explained solely by investors' interest rate expectations. D. According to the Pure Expectations Theory, an upward...
Which of the following is correct? A. The maturity premiums embedded in the interest rates on...
Which of the following is correct? A. The maturity premiums embedded in the interest rates on us treasury securities are due primarily to the fact that the probability of default is lower on long-term bonds than on short-term goals. B. If the maturity risk premium were zero and the rate of inflation were expected to increase in the future, then the yield curve for us treasurt securities would, other things held constant, have an upward slope. C. According to the...
When people expect interest rates to fall in the future, the _____ curve for bonds shifts...
When people expect interest rates to fall in the future, the _____ curve for bonds shifts to the _____. A. supply; right. B. demand; left. C. supply; left. D. demand; right.
If the expectations theory of the term structure of interest rates is correct, and if the...
If the expectations theory of the term structure of interest
rates is correct, and if the other term structure theories are
invalid, and we observe a downward sloping yield curve, which of
the following is a true statement? and why?
Investors expect short-term rates to be constant over time. Investors expect short-term rates to increase in the future. Investors expect short-term rates to decrease in the future. It is impossible to say unless we know whether investors require a positive...
- - higher interes in the long-term where My Pe Theory Market Netto They The Curve Theory None of the above fequitymarkets are strong form Micient Investors should chose quity portfolios randomly Investors should put money only in professionally managed equity portfolios Investors should not invest in equity securities Investors should invest in stocks with high P raties Investors should form portfolios that are well diversified and appropriate for their own levels of risk tolerance TO To apply the Dividend...
Using the Yield Curve to Estimate Future Interest Rates You can calculate the yield curve, given inflation and maturity-related risks. Looking at the yield curve you can use the information embedded in it to estimate the market's expectations regarding future inflation, risk, and short-term interest rates. The pure expectations shape of the yield curve depends on investors' expectations about future interest rates. The theory assumes that bond traders establish bond prices and interest rates strictly on the basis of expectations...
Yield curve is chart of interest rates (yield) usually with maturities of 1 month to 30 years. The interest rates depicted in the yield curve are of which type? Select one: O a. Annualized rates O b. Forward rates O c. Holding rates O d. Spot rates The relationship between a bond's price (present value) and bond's yield to maturity is inversely proportional; L.e. one goes up when the other goes down and vice versa. Because of that relationship, if...
If the expectation of short-term interest rate remains the same in the future, the expectations theory predicts that the yield curve will be while the liquidity preference theory predicts that the yield curve will be_ A B. C. D. Flat; flat Upward sloping; upward sloping Flat; upward sloping Upward sloping; flat The market capitalization rate on the stock of Aberdeen Wholesale Company is 12%. Its expected ROE is 10% am dots expected EPS is $3.00. if the firm's plow-back ratio...
If the expectations theory of the term structure of interest
rates is correct, and if the other term structure theories are
invalid, and we observe a downward sloping yield curve, which of
the following is a true statement? and why?
Investors expect short-term rates to be constant over time. Investors expect short-term rates to increase in the future. Investors expect short-term rates to decrease in the future. It is impossible to say unless we know whether investors require a positive...
Most questions answered within 3 hours.
-
Industry: Telecommunications in India
Here, you need to discuss the sources of the growth pattern
and...
asked 1 minute ago -
Hydrobromic acid
dissolves solid iron according to the followiaung reaction:
Fe(s)+2HBr(aq)→
FeBr2(aq)+ H2(g)
Part A. What...
asked 1 hour ago -
Verify the following vector identity in SPHERICAL
COORDINATES.
div(curl(A)) = 0
asked 3 hours ago -
The work function (Φ) for a metal is 7.50×10-19 J.
What is the longest wavelength (nm)...
asked 4 hours ago -
1. Would the following procedural changes cause the
calculated mass percent Ni2+ ion in Ni(NH3)nCl2 to...
asked 5 hours ago -
1. Why does the voltage of the capacitor vary with frequency?
where does this missing voltage...
asked 6 hours ago -
p p please write each step out clearly
3. A manager of a company is considering...
asked 5 hours ago -
On October 1, Ebony Ernst organized Ernst Consulting; on October
3, the owner contributed $83,540 in...
asked 7 hours ago -
A.)As an electron moves through a region of space, its speed
decreases from 9.60 × 106...
asked 7 hours ago -
In java with the netbeans program do:
Through object programming
Create a class "ContadorP", which is...
asked 7 hours ago -
Pattern Corporation acquired all of Science
Company's outstanding stock on January 1, 2016 for $600,000 cash....
asked 7 hours ago -
Here are all accounts Tyler Co. maintains.
Tax expenses $4,750
Common stocks $48,840
SG&A expenses $2,500...
asked 7 hours ago