Question
What is the nominal rate of return if the real rate is 3%, the inflation premium is 6%, and the risk premium is 0?? Fisher
What is the nominal rate of return if the real rate is 3%, the inflation premium is 6%, and the risk premium is 0?? Fisher effect worksheet
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What type of asset is in question 7?
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A corporation is issuing a AA rated bond. The average return for a AA bond is 7%. The coupon rate is 9% with a 25 year maturity. What is the value of this bond? Bond valuation worksheet.
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If you can buy the bond in question 9 now at 1100, what would your YTM be?
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If the company issuing the bond in question 9 undergoes some bad times and in 5 years the rating drops to BB, what will the value be in 5 years if the yield on BB bonds at that time is 10%?
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If you waited and then purchased the above bond in 5 years for 850, what would your YTM be then?
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The bond in question 9 is callable in 10 years. The price is currently $1,100. If the call
premium is the par value plus one years interest what is the yield to call?
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