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help pls Show ALL your work and calculations 1. As discussed in class, Operating Leverage = 2. Perpetual securities: a. You own a perpetual security.
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Show ALL your work and calculations 1. As discussed in class, Operating Leverage = 2. Perpetual securities: a. You own a perpetual security. If the perpetual security pays $1.20 per year and today's market rate for this security is 3.1% per year, what is its current market price? b. If the $1.20 annual payment described in Q2.a. is scheduled to increase at a rate of 1.0% per year, what is its current market price? 3. An APR reflects interest only; but an EAR includes interest. 4. If your credit card carries a rate of 1.5% per month, what is its APR? (Your answer should be a % carried to 1 place) 5. Your credit card carries an annual rate of 18% APR with a minimum payment due monthly. If you don't pay the monthly minimum amount for a year, what is its EAR? (Your answer should be a % carried to 2 places.) 6. You invest in a 20-year US Treasury bond that pays interest of 3.6% per year. If inflation is 1.5% per year, what is: a. The exact, real interest rate (Your answer should be a % carried to 3 places), and b. The approximate real interest rate? (Your answer should be a % carried to 1 place) 7. Yield curve questions: a. The US Treasury yield curve provides clues about the future direction of 1) 2) and 3) b. In a couple of words, why is the US Yield Curve usually upward sloping? c. In a few words, what is an inverted yield curve? d. An inverted yield curve is a prediction of 10/14/21 Step by Step Solution
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