finance data bank

| August 14, 2017

1.
Using the information and risk free
rate found in #5, what would the yield of a 30-day corporate bond be?

2.
4-year corporate securities are currently yielding 5.8%. You know
the following are the current interest rate premiums. Calculate the inflation
premium.

3
Interest rates on
4-year Treasury securities are currently 7%, while interest rates on 6-year
Treasury securities are currently 7.5%. If the pure expectations hypothesis is
correct, what does the market believe that 2-year securities will be yielding 4
years from now?

4. Interest rates
on 3-year treasury securities are currently 8%, while 6-year treasury
securities are 8.5%. If pure expectations hypothesis is correct, what does the
market believe that 3-year securities will be yielding 3 years from now?

5
One-year Treasury
securities yield 4.78%. The market anticipates that 1 year from now, 1-year
Treasury securities will yield 5.29%. If the pure expectation theory is
correct, what should be the yield today for 2-year Treasury securities?
6
3-year treasury securities beginning two years from
now are expected to yield 5.75%, whereas a 2-year Treasury security is
currently yielding 5%. A 2-year security is expected to yield 6.2% beginning 3
years from now. What is the yield for a 3-year treasury security beginning
today?

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