Saturday
April 19, 2014

Homework Help: finance

Posted by ky on Thursday, April 28, 2011 at 10:24pm.

Consider the following four debt securities, which are identical in every characteristic except as noted:

W: A corporate bond rated AAA

X: A corporate bond rate BBB

Y: A corporate bond rated AAA with a shorter time to maturity than bonds W and X

Z: A corporate bond rated AAA with the same time to maturity as bond Y that trades in a more liquid market than bonds W, X, or Y.

List the bonds in the most likely order of the interest rates (yields to maturity) of the bonds from highest to lowest. Explain your work.

2. Explain how an economist could use the slope of the yield curve to analyze the probability that a recession will occur and why the spread may matter.

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

economics - 1. Consider the following four debt securities, which are identical ...
Finance - Answers for a 10 year us treasury bond has a 3.50 % interest rate, ...
finance - Given the following table: Type of Security Interest Rate 5-Year ...
Finance - Interest rate premiums A 5-year Treasury bond has a 5.2 percent yield...
Corporate Finance - Calculating Cost of Debt. Peyton's Colt Farm issued a 30-...
financial management - A treasury bond that matures in 10 years has a yield of 6...
ECON 405 - As of July 26, 2011, the interest rate for a 20 year, A-rated ...
Corporate finance - A 1,000 face value bond has a remaining maturity of 8 years ...
Finance - If a financial institution is backed by any government program or ...
finance - 1. Yest Corporation's bonds have a 15-year maturity, a 7% semiannual ...

Search
Members