Could the current yield exceed the total return?

Q: Assuming that the pure expectations theory is correct, how are expected short-termrates used to…

A: Pure expectations theory believes that expected future rates can be represented by the forward…

Q: what is apr? do we use APR or EAR when we are calculating the present value of investment? is APR…

A: The term APR stands for Annual percentage rate. It reflects the amount of simple interest being owed…

Q: Explain the term Annual Effective Yields?

A: Annual effective yield: Annual effective yield is defined as the simple rate of interest that gives…

Q: Describe what the zero-coupon yield curve measures. Quickly sketch what you expect the likely shape…

A: A zero-coupon yield curve describes a zero-coupon yield bond which pays no coupon. Yield from zero…

Q: How can we find Yield to maturity?

A: Yield to maturity (YTM) is the foreseen absolute profit for a bond if the bond holds until due or…

Q: Can the Broader Diversification Increase Expected Return?

A: The concept of portfolio diversification is nothing but including unrelated assets in the…

Q: Write the various applications that call for annual-worth analysis techniques?

A: Annual worth analysis is the analysis which is done by the managers before taking capital budgeting…

Q: What is the marginal rate of return? How is it calculated?

A: Answer: Marginal rate of return can be defined as the return obtained or received by means of…

Q: A special case of the Internal Rate of Return (IRR) is the Yield to Maturity (YTM). Explain how the…

A: A yield curve plots the yield, or interest rates, of bonds with comparable credit grade but various…

Q: What causes the marginal rate of return to change over time?

A: Introduction: Marginal rate of return can be defined as the return attained or earned by holding a…

Q: How do maturity risk premiums affect the yield curve?

A: A premium, which a borrower pays to the lender in the form of compensation of interest rate…

Q: Present and Explain the theories of the Yield Curve?

A: The yield curve is a curve that shows the relationship between the interest rates and the different…

Q: What does the annual effective yield represent?

A: Yield refers to the rate of return that is received by the owner of the security who has invested in…

Q: r expected return on this investment?

A: Expected return on investment refers to the rate of return that an investor is expecting on an…

Q: Explain APY (annual percentage yield)?

A: APY (Annual Percentage Yield):   It is the real return rate that is earned on an investment during a…

Q: What was her dollar-weighted annual yield rate? Compute it exactly, and compare to using the…

A: Dollar weighted annual rate is that rate of return where present cash inflows are same as present…

Q: Whatis a yield curve?

A: It is the percentage of the securities at which the return is provided by the company to its…

Q: What is normal yield curve?

A: The yield curve is a curve that shows the many yields to maturity and interest rates. The curve also…

Q: So if the Return = (Total Dividend + change in market price ) / purchase Price, then why is the…

A: The total return is the actual rate of return on an investment or pool of investments during a…

Q: The formula of which of the following considers the percentage change in price? a. Total expected…

A: Percentage change in price Percentage change in price involves two prices of two different periods.…

Q: at what price there will be a margin call? what is your return?

A: Initial Margin or Account Value = 100Leverage ×Value of Short Selling…

Q: What is a yield curve? What does it mean when the yield curve is inverted?

A: Yield curve tells the relationship between the short term interest rates and long term interest…

Q: Consider IRR on Incremental Investment when Initial IRR Flows are equal?

A: Answer: IRR is a measure in capital budgeting used to measure the value of the predicted…

Q: What would be the expected change in profit?

A: "Contribution Margin: The Contribution Margin is also can be treated on a gross or per unit basis.…

Q: Expected return

A: Expected Return is the amount of loss or profit an investor expects to receive on an investment. It…

Q: Why is the t-bill's return independent of the state of the economy? Do t-bills promise a completely…

A: Treasury bills (T-bills) are a kind of short-term debt that is issued by the government with the aim…

Q: What are the measures of investment worth based on yield? What are they called?

A: Investment worth based on yield means that an investor is expecting certain income on an investment…

Q: What is the shape of the yield curve given the term structure below? What expectations are investors…

A: Yield Curve: The yield curve plots the different interest rates and maturities of bonds. It acts as…

Q: A) What was your expected yield to maturity? B) What was your actual rate of return?

A: The yield to maturity (YTM) is the annual percentage rate of return on a bond if the investor…

Q: In general, what effect would a reduction in risk have on “going-in” cap rates? What would this…

A: Capitalization rate is the projected rate of return percentage that a property will make on the…

Q: How do you calculate yield to maturity?

A: The yield to maturity is nothing but the interest rate of a bond. It can also be termed as the…

Q: A project is economically feasible if: O a. ts future worth is less than zero O b. its annual worth…

A: Future worth is the sum of future value of cash flows. Annual worth is the equivalent annual cash…

Q: What is meant by investment yields?

A: Investment Yield:  It defined as Earnings or income which is earned on investment over the period of…

Q: What is the formula for the following: Payback period. Net Present Value Internal Rate of return…

A: Accounting:   Accounting is the art of recording, classifying and summarizing in a significant…

Q: Do you think we can use the constant growth method to predict non constant growth price?

A: 1) Constant Growth Model: This assumes that a company's dividends are going to continue to rise at a…

Q: What is the typical discount rate used with the Net Present Value (NPC) when project risk is the…

A: The net present value (NPV) is the discounted value of benefits less the initial costs. The values…

Q: Net Present Value Suppose a project has conventional cash flows and a positive NPV. What do you know…

A: Capital budgeting techniques are the methodologies adopted by the management of the company with the…

Q: Use the ‘Liquidity Premium Theory’ to explain the shape of the yield curve.

A: Liquidity Premium Theory states that investors will require a higher rate of return(interest rate or…

Q: Explain an upward sloping yield curve using the pure expectation theory.

A: Pure expectation theory: Pure expectation theory states that expected future spot rates will be…

Q: How is a future worth yield?

A: Future worth yield is equals to future return on a particular amount. Future value is the value of…

Q: What is the difference between yield to maturity and current yield? Explain

A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…

Q: a) What is the level of saving rate that maximizes consumption at the steady state?

A: 1. In Solow’s growth model, a high level of savings leads to a large steady-state capital stock and…

Q: Calculate the present value PV (in dollars)

A: Today’s worth of dollars at a later date is the Present Value of the dollar. For example, the value…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.