Bond A is a 10-year U.S. Treasury bond. Bond B is a 10-year corporate bond. True or
Question:
a. If you hold bond A to maturity, your return will be equal to the yield to maturity.
b. If you hold bond B to maturity, your return will be equal to or less than the yield to maturity.
c. If you hold bond A for 5 years and then sell it, your return could be greater than the yield to maturity.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (9 reviews)
a True Ignoring reinvestment risk the promised yield on a treasury will mate...View the full answer
Answered By
Cyrus Sandoval
I a web and systems developer with a vast array of knowledge in many different front end and back end languages, responsive frameworks, databases, and best code practices. My objective is simply to be the best web developer that i can be and to contribute to the technology industry all that i know and i can do. My skills include:
- Front end languages: css, HTML, Javascript, XML
- Frameworks: Angular, Jquery, Bootstrap, Jasmine, Mocha
- Back End Languages: Java, Javascript, PHP,kotlin
- Databases: MySQL, PostegreSQL, Mongo, Cassandra
- Tools: Atom, Aptana, Eclipse, Android Studio, Notepad++, Netbeans.
Having a degree in Computer Science enabled me to deeply learn most of the things regarding programming, and i believe that my understanding of problem solving and complex algorithms are also skills that have and will continue to contribute to my overall success as a developer.
I’ve worked on countless freelance projects and have been involved with a handful of notable startups. Also while freelancing I was involved in doing other IT tasks requiring the use of computers from working with data, content creation and transcription.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Question Posted:
Related Video
The yield to maturity (YTM) is the percentage rate of return for a bond assuming that the investor holds the asset until its maturity date. This video will give a complete tutorial on how to calculate Yield to Maturity on Microsoft Excel
Students also viewed these Corporate Finance questions
-
A ten-year U.S. Treasury bond has a 3.50 percent interest rate, while a same maturity corporate bond has a 5.25 percent interest rate. Real interest rates and inflation rate expectations would be the...
-
A 10-year U.S. Treasury bond with a face value of $10,000 pays a coupon of 5.5% (2.75% of face value every six months). The semiannually compounded interest rate is 5.2% (a six-month discount rate of...
-
You ran a regression of the yield of KC Companys 10-year bond on the 10-year U.S. Treasury benchmarks yield using month-end data for the past year. You found the following result: YieldKC = 0.54 +...
-
In Exercises 1126, determine whether each equation defines y as a function of x. x + y = 25
-
Would you use exponential smoothing with a smoothing constant of 0.3, a 3-year moving average, or a trend to predict the sales of Cool-Man air conditioners?. Data from Sales of Cool-Man air...
-
Modify the diagram shown in Figure to include feed forward command compensation with a constant compensator gain Kf. Determine whether such compensation can eliminate steady-state error for step and...
-
The Washington Company owns no plant assets and had the following income statement for the year: Additional information about the company includes: Use the preceding information to calculate the cash...
-
On January 3, 2016, Quick Delivery Service purchased a truck at a cost of $90,000. Before placing the truck in service, Quick spent $2,500 painting it, $1,800 replacing tires, and $4,700 overhauling...
-
1.Daniel Sawyer, the CEO of the Sawyer Group, is initiating planning for the company's operations next year, and he wants you to forecast the firm's additional funds needed (AFN). The firm is...
-
Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. The production superintendent was pleased when...
-
Suppose that Casino Royale has issued bonds that mature in 1 year. They currently offer a yield of 20%. However, there is a 50% chance that Casino will default and bondholders will receive nothing....
-
A bond's credit rating provides a guide to its risk. Long-term bonds rated Aa currently offer yields to maturity of 7.5%. A-rated bonds sell at yields of 7.8%. Suppose that a 10-year bond with a...
-
Given opening capital of 16,500, closing capital as 11,350 and drawings were 3,300, then (A) Loss for the year was 1,850 (B) Profit for the year was 1,850 (C) Loss for the year was 8,450 (D) Profit...
-
How many NQOs would Harmer have to grant to keep its employees indifferent between NQOs and 2 0 ?ISOs? 32. Harmer Inc. is now a successful company. In the early days (before it became profitable), it...
-
Pizza Port, a craft brewing and pizza chain in southern California, manufactures thin-crust pizzas and offers one free pint of beer with the purchase of four large pizzas. What would you advise Pizza...
-
What are the main elements of an effective enterprise risk management (ERM) framework in the banking sector, and how do they help to mitigate operational and systemic risks ?
-
Becton Labs, Incorporated, produces various chemical compounds for industrial use. One compound, called Fludex, has the following standard cost per unit: Standard Quantity or Standard Price or Hours...
-
The equity sections for Atticus Group at the beginning of the year (January 1) and end of the year (December 31) follow. Stockholders' Equity (January 1) Common stock-$4 par value, 100,000 shares...
-
Richardson Company is contemplating the establishment of a share-based compensation plan to provide long-run incentives for its top management. However, members of the compensation committee of the...
-
What is the maximum volume of 0.25 M sodium hypochlorite solution (NaOCl, laundry bleach) that can be prepared by dilution of 1.00 L of 0.80 M NaOCl?
-
Using the Excel function CORREL, calculate the correlation between the return on San Tome Mining and each of the other four stocks mentioned in problem 7. Which stock offers the best diversification...
-
Rates of return on U.S. stock, bond, and bill indexes are available to download for free at pages. stern.nyu.edu/-adamodar. Click on "Updated Data" and look for "Historical Returns on Stocks, Bonds...
-
A large variety of mutual funds are available to Canadian investors. Some, called "sector funds," specialize in particular industries; others, known as "index funds," simply invest in the market...
-
I really need help with this question. The table in the second photo is what needs to be used to answer the question. The question is should Alex rent or buy, but in order to figure that out the...
-
A7. Assume that you have a sample of n1=9, with the sample mean x1=43 , and a sample standard deviation of S1=4 and you have an independent sample of n2=12 from another population with a sample mean...
-
A Town Council has decided to build a new community center to be used for conventions, concerts, and other public events, but considerable controversy surrounds the appropriate size. Many influential...
Study smarter with the SolutionInn App