Question
7. Define the nominal risk-free rate (rRF) and provide an example relevant to your target audience of a specific security that can be used as
7. Define the nominal risk-free rate (rRF) and provide an example relevant to your target audience of a specific security that can be used as an estimate of rRF. 8. Describe interest rate risk and reinvestment rate risk and how these relate to the maturity risk premium. Based on reinvestment rate risk, provide an example on how a 1-year bond or a 10-year bond would be a better investment for a typical community as represented by those attending your seminar. 9. Select an example appropriate to your seminar target audience to explain the concepts of a) term structure and interest rates and b) yield curve. 10. Review corporate bankruptcy law. If a firm were to default on its bonds, describe how the company assets could be/would be liquidated. What is a likely outcome for bondholders? Select and describe an example scenario that applies to your seminar attendees organizations. Prepare this assignment according to the guidelines found in the APA Style Guide.
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