Question
Which of the following is correct? Bond Maturity Liquidity Default Risk YTM A Short High Low 3.0% B Long High Low 4.0% C Long Low
Which of the following is correct?
| Bond | Maturity | Liquidity | Default Risk | YTM |
| A | Short | High | Low | 3.0% |
| B | Long | High | Low | 4.0% |
| C | Long | Low | Low | 4.5% |
| D | Long | Low | High | 5.0% |
| The liquidity premium is equal to the maturity premium. | |||||||||||
| The maturity premium is higher than the default risk premium. | |||||||||||
| The liquidity premium is higher than the default risk premium.
You observe a stock price of $17. You expect a dividend growth rate of 5% and the next year's dividend was $1.70. What is the required return?
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Derivatives And Internal Models
Authors: H. Deutsch
4th Edition
1349307661, 9781349307661
