Yield to maturity and price Seleccione una: a. Move in opposite directions in exact proportions b. Move in the same direction but at different percentages c. Move in opposite directions d. Move in the same direction
Q: Explain the differences between yield-to-maturity and yield-to-call
A: While both yield to maturity and yield to call are related to bonds they are not the same thing.
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Q: Compare and contrast dollar returns and rates of return.
A: The returns from any investment can be calculated in terms of value (amount terms) or percentages.
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: A special case of the Internal Rate of Return (IRR) is the Yield to Maturity (YTM). Explain how the…
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Q: Nominal values are measured in ________ and real values take account of
A: Given Nominal values are measured ? Real values taken account of?
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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: What is the relationship between the price, coupon rate and market yield?
A: The coupon rate is the bond's interest rate. The coupon rate is not the same as the market interest…
Q: The internal rate of return is: discount rate that makes the profitability index (PI) greater than…
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Q: Which of the following is consistent with a steeply upwardly sloping yield curve?a. Monetary policy…
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Q: ernal rate of return and the discount rate turn pany's discount rate or internal rate of return unt…
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Q: The _______ models the relationship between inflation rate, nominal return, and real return.…
A: Fisher effect: states that nominal rate is equal to real interest rate plus inflation.
Q: Explain a flat yield curve using the segmented market theory.
A: Mаrket segmentаtiоn theоry is а theоry thаt lоng аnd shоrt-term interest rаtes аre nоt…
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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: /hy is yield to maturity more important than coupon rate when nmes to honds?
A: In bonds there are coupon payments paid each year and par value on the maturity of the bond.
Q: a. A market value-weighted index Rate of return b. An equally weighted index %
A: Rate of return The profit an investor makes from an investment is called the rate of return. It…
Q: Explain the difference between the yield to maturity and the yieldto call.
A: Bonds are the fixed income securities issued by the government or companies to raise funds from the…
Q: distinquish between current yield, coupon rate and yield to maturity
A: current yield is the yield of the bond at present moment.
Q: (a) Elucidate price and output determination under any two non-collusive models of Oligopoly.
A: The word oligopoly is derived from a combination of 2 Greek words; 'oligos' which means "few" and…
Q: Production opportunities; time preferences for consumption; risk; inflation
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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: [Pricing the Variance Contract]. Suppose we have the assumptions of the Black- Scholes Model. Find…
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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: Explain with example the Yield to Maturity?
A: A bond is a financial instrument that is issued by the government and the corporate to raise the…
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…
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- A special case of the Internal Rate of Return (IRR) is the Yield to Maturity (YTM). Explain how the YTM is used to calculate the yield curve and why investors track moves in the yield curve. I would appreciate a long response and the post attention to be paid on why investors track moves in the yield curve.The formula of which of the following considers the percentage change in price? a. Total expected yield b. Yield to date c. Present value yield d. Yield to maturityConsider the following regression Pt * - Pt = .07(1.4) + .4*Pt (3.6) + et where Pt * is Shiller’s ex post price of a stock, Pt is the actual price and t-ratios are in brackets. Explain in words and analytically what the dependent variable Pt * - Pt should be equal to under the efficient markets theory. Hence interpret the regression. Does it support the efficient markets theory?
- Based on the efficient markets hypothesis, the current price reflects to Select one:the discounted net present valuefuture interest paymentsNone of the answers are correctall available and relevant informationthe cost price.This calculation determines profitability or growth potential of an investment, expressed as a percentage, at the point where NPV equals zero A. internal race of return (IRR) method B. net present value (NPV) C. discounted cash flow model D. future value methodThe _______ models the relationship between inflation rate, nominal return, and real return. Multiple Choice Interest Rate Parity. Put-Call Parity. Fisher Effect. Law of One Price. Purchasing Power Parity.
- The target rate of return on investment the percentage used to markup the cost to an acceptable selling price. True FalseThe slope of the Security Market Line equals to ____, and the slope of Capital Allocation Line equals to____. Select one: A. Beta; Sharpe Ratio B. Market Risk Premium; Sharpe Ratio C. Risk free rate; Volatility D. Market Risk Premium; Volatilitydentify the decision rule that best fits each of the following descriptions. Dollar profit Optimistic percentage return Return that assumes reinvestment at WACC Options; MIRR IRR PI
- This method evaluates the return of an investment by dividing the annual average income by the average investment, Select one: a. Discounted Approach b. Simple rate of return Method c. Cash Payback Method d. Internal Rate of Return MethodMatch each term with the best definition or descriptor. NPV is __________ ( a unitless ratio, a unit of time, a dollar vallue, or a rate of return). IRR is ___________ ( a unitless ratio, a unit of time, a dollar vallue, or a rate of return). Profitability index is __________( a unitless ratio, a unit of time, a dollar vallue, or a rate of return).Which one of the following is an indicator that an investment is acceptable? Check all that apply: Profitability index equal 1.5 Profitability index greater than 0 the required return less than internal rate of return IRR equal to zero Payback period exceeds the required period Profitability index equal 1