Explain why y0u disagree 0r agree with the f0ll0wings statements. The answer sh0u-ld n0t be m0re than three sentences All 0ther things held c0nstant; the future value of an 0rdinary annuity is always having a higher future value than annuity due. All 0ther things held c0nstant, the price 0r interest rate risk of sh0rt-term b0nd is always l0wer than l0ng-term b0nd. Treasury b0nds are riskier than c0rp0rate b0nds.
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Explain why y0u disagree 0r agree with the f0ll0wings statements. The answer sh0u-ld n0t be m0re than three sentences
- All 0ther things held c0nstant; the future value of an 0rdinary annuity is always having a higher future value than annuity due.
- All 0ther things held c0nstant, the price 0r interest rate risk of sh0rt-term b0nd is always l0wer than l0ng-term b0nd.
- Treasury b0nds are riskier than c0rp0rate b0nds.
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- Explain why y0u agree 0r disagree with the f0ll0wing statements. The answer sh0uld n0t be m0re than three sentences . Treasury b0nds are riskier than c0rp0rate b0nds. All 0ther things held c0nstant; the future value 0f an 0rdinary annuity is always having a higher future value than annuity due. All 0ther things held c0nstant, the price 0r interest rate risk 0f sh0rt-term b0nd is always l0wer than l0ng-term b0nd.Explain why y0u disagree 0r agree with the f0ll0wing statements. The answer sh0uld n0t be m0re than 3 sentences Treasury b0nds are riskier than c0rp0rate b0nds. All 0ther things held c0nstant; the future value 0f an 0rdinary annuity is always having a higher future value than annuity due. All 0ther things held c0nstant, the price 0r interest rate risk 0f sh0rt-term b0nd is always l0wer than l0ng-term b0nd.Explain why y0u disagree 0r agree with the f0ll0wing statements. The answer sh0uld n0t be m0re than 3 sentences Step 1 Define Treasusy BondS & Corporate Bonds Step 2 Difference between annuity due and ordinary annuity Step 3 Treasury b0nds are riskier than c0rp0rate b0nds. All 0ther things held c0nstant; the future value 0f an 0rdinary annuity is always having a higher future value than annuity due. All 0ther things held c0nstant, the price 0r interest rate risk 0f sh0rt-term b0nd is always l0wer than l0ng-term b0nd.
- Explain why y0u disagree 0r agree with the f0ll0wing statements. The answer sh0uld n0t be m0re than 3 sentences (with reference of google links) Step 1 Define Treasusy BondS & Corporate Bonds Step 2 Difference between annuity due and ordinary annuity Step 3 Treasury b0nds are riskier than c0rp0rate b0nds. All 0ther things held c0nstant; the future value 0f an 0rdinary annuity is always having a higher future value than annuity due. All 0ther things held c0nstant, the price 0r interest rate risk 0f sh0rt-term b0nd is always l0wer than l0ng-term b0ndWhich is the better option if the interest rate is r=0.07 (r=7%)? Show all work used to arrive at your answer. a. Option I: Receive $510 today at time t=0. b. Option II: Receive $1000 at time t=10.Which is the better option if the interest rate is r=0.07 (r=7%)? Show all work used to arrive at your answer. a. Option I: Receive $510 today at time t=0. b. Option II: Receive $1000 at time t=10. Show work on both options!
- 1) What is the future value at time t=3 for a present value of PV=$100 (e.g., t=0) if the interest rate is r=0.10 (e.g., r=10%)? 2) What is the future value at time t=18 for a present value of PV=$1525 (e.g., t=0) if the interest rate is r=0.085 (e.g., r=8.5%)? 3) What is the present value of a future value of FV=$500 at time t=5 if the interest rate is r=0.10 (e.g., r=10%)? 4) What is the present value for a future value of FV=$500,000 at time t=36 if the interest rate is r=0.05 (e.g., r=5%)? 5) What is the interest rate “r” if PV=$100 and the FV=$350 in year t=12? 6) What is the interest rate “r” if PV=$1250 and the FV=$2150 in year t=10? 7) How long will it take to double your investment if the interest rate is r=0.06 (r=6%)?8) How long will it take to increase your investment by 2.5 times if the interest rate is r=0.14 (r=14%)?9) Which is the better option if the interest rate is r=0.10 (r=10%)? Show all work used to arrive at your answer. a. Option I: Receive $1000 today at time…I just want to make sure that I'm correct, the answers I selected are in bold. If it doesn't show: 1. D (the risk-free rate plus a risk premium) 2. B (conversion) 3. C (par value) 4. B ($655.00) - For question 4, the table is attached. 1) Nominal rate of interest is equal to ________. A) the real rate plus an inflationary expectation B) the real rate plus a risk premium C) the risk-free rate plus an inflationary expectation D) the risk-free rate plus a risk premium 2) The ________ feature allows bondholders to change each bond into stated number of shares of stock. A) call B) conversion C) put D) swap 3) A $1,000, 8% bond sells for 980. $1,000 is called the ________. A) current value B) market value C) par value D) auction value Assume the below information to answer the following question(s). 4) Based on the table above, assume this bond's face value is $1,000. What is the bond's current market price? A) $65.00 B) $655.00 C) $650.00 D) $6,550.004. Find the interest rate implied by the following combinations of present and future values: (Round your answer to the nearest whole value.) Present Value Years Future Value Intrest rate A. $400 11 $684 B. $183 4 $249 C. $300 7 $300
- I asked this question yesterday: Suppose that, in each period, the cost of a security either goes up by a factor of 2 or goes down by a factor of 1/2 (i.e. u=2, d=1/2). If the initial price of the security is 100, determine the no-arbitrage cost of a call option to purchase the security at the end of two periods for a price of 150. In the answer I got today the first step said: "We assume that the probability of moving up and moving down be 50% each, which means equal chances for both the movements. " I had learned that the risk neutral probability for the stock price to go up is: p=(1+r-d)/(u-d). In this particular problem, we'd have p=(1+0-.5)/(2-.5)=1/3. And so the probability going down would be 1-p or 2/3. Thus, my question is why weren't these probabilities used in the solution previously sent? And if they should be, what would be the new solution to the problem? Thank you for your help. I'm new to learning all of this and some of it is hard for me to understand.Question 2: Given the interest rate determinants information below: Scenario A Scenario B Average expected inflation (IP) 4% 8% Risk-free rate of return (Rf) 1.75% 3% Default Risk Premium (DRP) 1.1% 0.6% Maturity risk premium (MRP) .008 x (t – 1) .006 x (t – 1) Determine the Nominal interest rate (INOM) on 10 years’ (t) security for both the scenarios to decide whether Scenario A or Scenario B is better.Assume the real rate of interest is 4.00% and the inflation rate is 4.00%. What is the value today of receiving 13,840.00 in 11.00 years? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.