Which of the following statement is/are correct about US treasury securities? 1. All securities issued by the United States are fixed income instrument 2. The securities issued for not less than 10 years is termed as bonds 3. The securities issued for a period ranging from 365 days till ten years is termed as notes

Which of the following statement is/are correct about US treasury securities? 1. All securities issued by the United States are fixed income instrument 2. The securities issued for not less than 10 years is termed as bonds 3. The securities issued for a period ranging from 365 days till ten years is termed as notes

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 15DQ

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he following information is about the spot rates on Treasury securities and BBB corporate bond: Spot 1 Year Spot 2 Year Spot 3 Year Treasury 3% 4.75% 5.5% BBB Corporate Debt 7.5% 9.15% 10.5% Question: What is the implied forward rates on one-year maturity BBB corporate debt to be delivered in year 3?
. Which of the following securities would be classified as marketable securities inthe current asset section of the balance sheet?a) Commercial paper, U.S. Treasury bills, land held for investment.b) Commercial paper, U.S. Treasury bills, negotiable certificates of deposit.c) Commercial paper, land held for investment, bonds with maturities in 10 years.d) U.S. Treasury bills, long-term stock investment, bonds with maturities in 10years.*
These are short-term securities issued by the U.S. government with maturities of 13 to 52 weeks: Group of answer choices Commercial paper Bankers' acceptances Treasury bills All of these
are obligations of the U.S. Treasury with common maturities of 91 to 182 days and that have a strong secondary market. A. Treasury notes B. Treasury bills C. Federal agency issues O D. Banker's acceptances (Please type answer).
Your investment department has researched possible investments in corporate debt securities. Among the available investments are the following $100 million bond issues, each dated January 1, 2018. Prices were determinedby underwriters at different times during the last few weeks.Company Bond Price Stated Rate1. BB Corp. $109 million 11%2. DD Corp. $100 million 10%3. GG Corp. $ 91 million 9%Each of the bond issues matures on December 31, 2037, and pays interest semiannually on June 30 and December31. For bonds of similar risk and maturity, the market yield at January 1, 2018, is 10%.Required:Other things being equal, which of the bond issues offers the most attractive investment opportunity if it can bepurchased at the prices stated? The least attractive? Why?
The following information is about the spot rates on Treasury securities and BBB corporate bond: Spot 1 Year Spot 2 Year Spot 3 Year Treasury 3% 4.75% 5.5% BBB Corporate Debt 7.5% 9.15% 10.5% Question: Using the implied forward rates, estimate the annual marginal default probability for the one-year BBB corporate debt in year 3?
The following information is also available: 1. Current assets include cash P3,800, accounts receivables P18,500, note receivables (maturity date is on July 1,2023) P10,000 and land P12,000. 2. Long term investments include a P4,600 investment in fair value though other comprehensive income securitiesthat is expected to be sold in 2022 and a P9,000 investment in AllDay company bonds that are expected to be helduntil their December 31, 2029 maturity date. 3. Property and equipment include buildings costing P63,400, inventories costing P30,500 and equipment costingP29,600. 4. Intangible assets include patents that cost P8,200 and on which P2,300 amortization have accumulated, andtreasury shares that costs P1,800. 5. Other assets include prepaid insurance (which expires on November 30, 2022) P2,900, sinking fund for bondretirement P7,000 and trademarks that cost P5,200 and on which P1,500 amortization has accumulated. 6. Current liabilities include accounts payable P19,400, bonds payable…
The following information is also available: 1. Current assets include cash P3,800, accounts receivables P18,500, note receivables (maturity date is on July 1,2023) P10,000 and land P12,000. 2. Long term investments include a P4,600 investment in fair value though other comprehensive income securitiesthat is expected to be sold in 2022 and a P9,000 investment in AllDay company bonds that are expected to be helduntil their December 31, 2029 maturity date. 3. Property and equipment include buildings costing P63,400, inventories costing P30,500 and equipment costingP29,600. 4. Intangible assets include patents that cost P8,200 and on which P2,300 amortization have accumulated, andtreasury shares that costs P1,800. 5. Other assets include prepaid insurance (which expires on November 30, 2022) P2,900, sinking fund for bondretirement P7,000 and trademarks that cost P5,200 and on which P1,500 amortization has accumulated. 6. Current liabilities include accounts payable P19,400, bonds payable…
Consider the following information for a period of years: Arithmetic Mean Long-term government bonds 7.1 % Long-term corporate bonds 7.2 Inflation 4.2 a. What is the real return on long-term government bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the real return on long-term corporate bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Consider the following information for a period of years: Arithmetic Mean Long-term government bonds 7.6% Long-term corporate bonds 7.7 Inflation 4.6 What is the real return on long-term government bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the real return on long-term corporate bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
The following information is also available: 1. Current assets include cash P3,800, accounts receivables P18,500, note receivables (maturity date is on July 1, 2023) P10,000 and land P12,000. 2. Long term investments include a P4,600 investment in fair value though other comprehensive income securities that is expected to be sold in 2022 and a P9,000 investment in AllDay company bonds that are expected to be held until their December 31, 2029 maturity date. 3. Property and equipment include buildings costing P63,400, inventories costing P30,500 and equipment costing P29,600. 4. Intangible assets include patents that cost P8,200 and on which P2,300 amortization have accumulated, and treasury shares that costs P1,800. 5. Other assets include prepaid insurance (which expires on November 30, 2022) P2,900, sinking fund for bond retirement P7,000 and trademarks that cost P5,200 and on which P1,500 amortization has accumulated. 6. Current liabilities include accounts payable P19,400, bonds…
The Analysis and Valuation of Bonds, Investment Analysis and Portfolio Management1. The following table shows spot rates on US Treasury securities as of January 1, 2019:Term to Maturity CalculatedSpot Rates1 Year 3.50%2 Years 4.50%3 Years 5.00%4 Years 5.50%5 Years 6.00%10 Years 6.60%Based on the data on the tablea) Calculate the one-year implied forward rate, four years from now.b) Calculate the 2-year implied forward rate, two years from now.