Pure expectations theory The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates. Based on the pure expectations theory, is the following statement true or false? The pure expectations theory assumes that a one-year bond purchased today will have the same return as a one-year bond purchased five years from now. False True The yield on a one-year Treasury security is 5.8400%, and the two-year Treasury security has a 7.0080% yield. Assuming that the pure expectations theory is correct, what is the market’s estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.) 10.3999% 6.9606% 8.1889% 9.3353% Recall that on a one-year Treasury security the yield is 5.8400% and 7.0080% on a two-year Treasury security. Suppose the one-year security does not have a maturity risk premium, but the two-year security does and it is 0.2%. What is the market’s estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.) 8.8748% 6.6172% 7.7849% 9.8868% Suppose the yield on a two-year Treasury security is 5.83%, and the yield on a five-year Treasury security is 6.20%. Assuming that the pure expectations theory is correct, what is the market’s estimate of the three-year Treasury rate two years from now? (Note: Do not round your intermediate calculations.) 6.53% 6.45% 5.46% 6.69%

Answers

Answer 1

Answer:

False

6.9606

9.8868

Explanation:

Forward rates represent the expected future rate. This theory is known as pure expectation theory. The bond purchase today will not have the discount factor affect whereas the bond purchased five years from now will have different return from today. The five year value will need to be discounted in order to find the return on todays date.


Related Questions

Suppose that you are on a desert island and possess exactly 20 coconuts. Your neighbor, Friday, is a fisherman, and he is willing to trade 2 fish for every 1 coconut that you are willing to give him. Another neighbor, Kwame, is also a fisherman, and he is willing to trade 3 fish for every 1 coconut.

a. On a single figure, draw budget lines for trading with Friday and for trading with Kwame. (Put coconuts on the vertical axis.)
b. What is the slope of the budget line from trading with Friday?
c. What is the slope of the budget line from trading with Kwame?
d. Which budget line features a larger set of attainable combinations of coconuts and fish?
e. If you are going to trade coconuts for fish, would you rather trade with Friday or Kwame?

Answers

Answer:

a) see attached image

b) Friday's slope = 1/2

c) Kwame's slope = 1/3

d) Kwame's budget line since it includes 60 fish on one side and 20 coconuts on the other.

e) Kwame is willing to pay more fish per coconut

1. Suppose a firm's cost function is given by C(Q)=6Q+Q^2 when it produces Q units of its product.
This small, profit-maximizing firm is active in a perfectly competitive market. After observing the
going price for its product, it decides to produce 3 units of output: Q=3. What is the firm's elasticity
of supply?
1.5
b. 2*
c. 2.5
d. 3
a.

Answers

Answer:

2.5

Explanation:

because that's the answer

A painting operation is performed by a production worker at a labor cost of $1.40 per unit. A robot spray-painting machine, costing $15,000, would reduce the labor cost to $0.20 per unit. If the device would be valueless at the end of 3 years, what is the minimum number of units that would have to be painted each year to justify the purchase of the robot machine

Answers

Answer:

4,167 units

Explanation:

The computation of the minimum number of units that should be painted is as follows;

Let us assume the number of units in 3 years be x

So the labor cost without the machine is 1.4x

And, the Labor cost with the machine is  0.2x + $15000

Now the equation is

1.4x = 0.2 x + $15,000

x = $12500

Now

For Each year, it is

= $12,500 ÷ 3

= 4,167 units

If you have done everything correctly, you might realize that stagflation creates a dilemma for the Fed. Why

Answers

Answer:

A. If the Fed wants to reduce inflation, it must be willing to accept higher unemployment.

B. If the Fed wants to reduce unemployment, it must be willing to accept more inflation.

Explanation:

When everything has done in correct manner than you realize that the stagflation develops a dilemma for the fed as in the case when fed wants to decrease the inflation so it would be accepted higher unemployment

And in the case when the fed wants to decrease the unemployment so he accept more inflation

as it creates a tradeoff between the inflation and unemployment in the short run as shown by the philips curve

A benefit to the sellers in allowing customers to use credit cards is________. Group of answer choices to avoid having to evaluate a customer's credit standing for each sale to lessen the risk of extending credit to customers who cannot pay to increase the speed of receipt of cash from the credit sale all of the options are reasons for credit card use

Answers

Answer: All of the options are reasons for credit card use

Explanation:

By using credit cards to facilitate sales, sellers do not need to evaluate a customer's credit standing for each sale because the credit card pays.

By extension, the seller would not have to worry about extending credit to less creditworthy customers because this risk is passed on to the credit card company.

Using credit cards also increases receipt of cash from the sale because the credit card actually pays the seller.

Blue Ivy Inc. has the following transactions for the month of March: Issued common stock $60,000 Purchased land by paying cash $100,000 Paid expenses $25,000 Earned cash fees $75,000 As a cumulative result of these transactions, the liquidity of Blue Ivy Inc.:

Answers

Answer:

$10,000

Explanation:

Blue Ivy's statement of cash flow:

+ cash from operating activities (earned cash fees - paid expenses) $50,000

- cash from investing activities (buying land) $100,000

+ cash from financing activities (issuing new stocks) $60,000

net cash flow for the month = $10,000

A disadvantage of franchising to the franchisee is: Group of answer choices national name recognition ongoing management training program standardized operating procedures restricted operating freedom assistance in site location

Answers

Answer:

restricted operating freedom

Explanation:

Franchise is a license consisting of a contractual arrangement between a parent company and another, that allows individuals or an organization access to its knowledge, processes, trademarks in order to provide a service.

One of the main advantages of a franchise is that, franchisers such as McDonald do not require additional capital and development expenses to have their businesses being situated in a foreign market or country, as they only required to issue licenses to franchisors who are interested in being part of their business by paying a fee.

Hence, a disadvantage of franchising to the franchisee is restricted operating freedom.

Additionally, a product distribution franchise can be defined as a supplier-dealer business relationship in which a dealer (franchisee) is granted a license by the manufacturer (franchisor) to sell and distribute their products.

In this type of franchise, the dealer (franchisee) is only granted the license to use just the logos and trademarks of the manufacturer (franchisor) but not the framework (system) for the establishment and operations of the business.

Some examples of a product distribution franchise is Fords motors, Coca-Cola, mobile homes, Guiness etc.

LBM, Inc. issues 25,000 shares of common stock for $20 per share. The stock has a par value of $1 per share. By what amount would LBM credit capital in excess of par? Group of answer choices $500,000 $475,000 $25,000

Answers

Answer:

$475,000

Explanation:

Calculation for By what amount would LBM credit capital in excess of par

Dr Cash $500,000

(25,000 shares*$20 per share)

Cr Common Stock $25,000

(25,000 shares*$1 per share)

Cr Capital in excess of par $475,000

($500,000-$25,000)

Therefore based on the above Journal entry and calculation the amount that LBM would credit as capital in excess of par will be $475,000 ($500,000-$25,000).

A credit entry was recorded for unearned revenue and a debit for cash. What does this entry indicate?

Answers

Answer:

This means that there is an increase in cash(cash has been collected). And for the unearned revenue which is a liability, there is an increase in the liability

Explanation:

This means that there is an increase in cash(cash has been collected). And for the unearned revenue which is a liability, there is an increase in the liability.

Note: Debit side increases asset(cash) and expenses while credit side decreases liability,income and equity.

Credit side decreases asset(cash) and expenses while debit side increases liability,income and equity.

Which consequences can victims of identity theft face? Check all that apply.
V difficulty getting a loan or credit card
U an increase in debt
O the loss of a job
D difficulty keeping assets
Da loss of money
D difficulty landing a new job

Answers

The Answer should be 1 ,2 ,3 & 4 .

Answer:

1,2,5,6

Explanation:

edge21

The U.S. has accused China of artificially deflating the value of their currency. What would be the motivation for the Chinese to pursue such a policy

Answers

Answer: Cheaper exports

Explanation:

A large part of the Chinese economy is dependent on the foreign trade it initiates with the rest of the world. Having a weak currency can aid that.

Export prices are quoted in the currency of the country doing the exporting so if their currency is weaker relative to a country they are exporting to, their goods will be cheaper in that market which will make people want to buy their goods more.

This is why China would deflate its currency. Having a weaker currency means their exports are cheaper which will increase the amount of it bought.

Well-functioning markets allow: a. mutually beneficial trades to take place. b. property rights to be unnecessary components of effective distribution. c. producers to gain at the expense of consumers. d. consumers to gain at the expense of producers. e. producers to reap greater benefits since they have greater power in the market

Answers

Answer:

a. mutually beneficial trades to take place.

Explanation:

Well-functioning markets allow mutually beneficial trades to take place.

This simply means that, in a perfectly competitive market, there are many buyers and sellers (price takers) of homogeneous products (standardized products with substitute) and the market is free (practically open) to all individuals or business entities that are willing to trade all their goods and services.

Hence, a well-functioning market such as a perfectly competitive market is characterized by the following features;

1. Perfect information.

2. No barriers, it is typically free.

3. Equilibrium price and quantity.

4. Many buyers and sellers.

5. Homogeneous products.

Examples of a perfectly competitive market are the Agricultural sector, e-commerce and the foreign exchange market.

According to the Sports Business Journal, Levy Restaurants is the leading purveyor of premium food at major sports venues. It has chefs that specialize in the preparation of various foods working at different sports venues. For the Super Bowl, Levy flew in more than two dozen of its chefs from venues to prepare food to feed the Super Bowl crowd. The chefs had the necessary _____ skills.

Answers

Answer:

Functional

Explanation:

In the given case since it is mentioned that levy restaurants would served as a premium food for majort sport venues also there chefs would be working on various sport venues.

So this represents that the chef has the necessary functional skills due to which they are very well known to the public at general

Thus, the same is relevant

Accounts receivable are shown as _____ in the AR customer file.

Answers

The answer is b.

Thank me by clicking on the ❤️. Thanks!

The Accounts receivable are shown as the debit side of the account receivable customer file. Hence, the option d is correct.

What is account receivable?

It is the concept when the goods are sold on credit basis to the customer and the payment is to be received after some time.

It is to be shown in the asset side of the balance sheet.

Also, it contains the normal debit balance.

Hence, the option d is correct.

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Both __________-__________, __________-__________ and __________-__________, __________-__________ methods of inventory valuation are assumptions as to the flow of costs.

Answers

Answer: First-In, First-out; Last-in, First-out

Explanation:

First-In, First-out(FIFO) and Last-in, First-out(LIFO) are both methods of inventory valuation that are used to assume the cost of inventory such that Cost of Goods sold can be calculated.

FIFO works by assuming that the oldest inventory purchased by the company is the one that was sold first while LIFO works by assuming that the newest inventory is sold first.

Using FIFO therefore will result in lower inventory costs because it is using old prices as opposed to LIFO which would reflect the increase in inventory prices as it is using recent prices.

If the opportunity cost of capital is 11%, and you have unlimited access to the capital, which one(s) would you accept

Answers

Answer:

Only Projects B and C would be accepted.

Explanation:

Note: This question is not complete. See the attached pdf file for the complete question.

The explanation of the answer is now given as below.

Since there is an unlimited access to the capital, tTo decide which project to accept, we first calculate the net present values (NPVs) of Projects A, B and C to see which one have positive NPV.

Note: See the attached excel file for the calculation of the net present values (NPVs) of Projects A, B and C.

In the attached excel, the following formula is used:

Discounting Factor = 1/(1 + r)^n

Where;

r  = Opportunity cost of capital or interest rate = 11%, or 0.11

n = the year under consideration

From the attached excel file, we have:

NPV of Project A = ($1,094) = -$1,094

NPV of Project B = $3,250  

NPV of Project C = $2,200

Decision criterion: Accept projects with positive NPV and reject projects with negative NPV.

Conclusion:

Based on the, only projects B and C which have positive NPV of $3,250 and $2,200 respectively would be accepted, while project A with a negative NPV of -$1,094 would be rejected.

Reinhardt Furniture Company has 40,000 shares of cumulative preferred 2% stock, $150 par and 100,000 shares of $5 par common stock. The following amounts were distributed as dividends: Year 1 $70,000 Year 2 200,000 Year 3 320,000 Determine the dividends per share for preferred and common stock for each year. If an answer is zero, enter '0'. Round all answers to two decimal places. Year 1 Year 2 Year 3 Preferred stock (Dividends per share) $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Common stock (Dividends per share) $fill in the blank 4 $fill in the blank 5 $fill in the blank 6

Answers

Answer:

Reinhardt Furniture Company

The dividends per share for preferred and common stock for each year:

                            Year 1               Year 2              Year 3

Preferred             $3.00                $3.00                $3.00

Common stock     $0                    $0.30                $2.00

Explanation:

a) Data and Calculations:

Cumulative preferred 2% stock = 40,000 shares

Cumulative preferred 2% share capital = $6,000,000 ($150 * 40,000)

Common stock = 100,000 shares

Common stock share capital = $500,000 ($5 * 100,000)

Cumulative preferred 2% annual dividend = 2% of $6,000,000 = $120,000

                          Total dividends   Preferred dividends  Common dividends

Amount distributed:

Year 1                    $70,000               $70,000 ($50,000)                       $0

Year 2                  200,000              $170,000                                 $30,000

Year 3                  320,000              $120,000                              $200,000

b) Dividend per share for preferred stock is $120,000/40,000 = $3.00 per annum.  This is the amount of dividend per share because the shares are cumulative.  The holders will always get paid at the next period when enough dividends are declared.  For the common stock, the dividend per share depends on the actual dividends distributed to the holders, divided by 100,000 shares.

A time ticket: Shows the time an employee worked on each job only. Shows the time an employee worked on each job and the total cost chargeable to each job only.

Answers

Answer: a. the time that a department's employees worked on all jobs, the pay rate of each employee, and the total cost chargeable to each job.

Explanation:

Time tickets help record the number of hours an employee worked. It is therefore very useful in calculating the wages due to a worker as that is based on the number of hours worked.

The time ticket will include the time that the employee worked on all jobs, the pay rate for the employee for those jobs and the total cost to the company for each job the the employee performed.

Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm's total-debt-to-total-capital ratio was 17.5%. The firm finances using only debt and common equity, and its total assets equal total invested capital. Based on the DuPont equation, what was the ROE

Answers

Answer:

the ROE is 10.133%

Explanation:

The computation of the ROE is shown below:

Total Equity =Total Assets ×  (1 -Debt to Total Assets Ratio)

= $250,000 × (1 - 0.25)

= $187,500

Now

ROE = Net Income ÷ Total Equity

= $19,000 ÷ $187,500

= 10.133%

Hence, the ROE is 10.133%

What is the answers please I’m struggling

Answers

Answer:

a. $288,000

b. $190,000

Explanation:

The Accounting equation: Assets = Liabilities + Equity

a. Assets = Liabilities + Equity

382,000 = 94,000 + Equity

Equity = 382,000 - 94,000

= $288,000

b. Equity as of December 20Y9.

Account for the changes in assets and equity:

Assets = Liabilities + Equity

(382,000 - 63,000) = (94,000 + 35,000) + Equity

319,000 = 129,000 + Equity

Equity = 319,000 - 129,000

= $190,000

A 20-year bond priced to have an annual effective yield of 10% has a Macaulay duration of 11. Immediately after the bond is priced, the market yield rate increases by 0.25%. The bond's approximate percentage price change, using a first-order Macaulay approximation, is X. Calculate X.

Answers

Answer:

-2.50%

Explanation:

Calculation for X

Using this formula

X=Change in price/0ld price*100

Let plug in the formula

X=-P(0.10)(11/1.10)(0.0025)/P(0.10)*100

X=-P(0.10)(10)(0.0025)/P(0.10)*100

X=-2.50%

Therefore X is -2.50%

Cost per equivalent unit for Material Q under the weighted-average method is calculated to be: $5.65. $2.30. $4.60. $3.00. $2.75.

Answers

Answer:

$3.00

Explanation:

Calculation for the Cost per equivalent unit for Material Q under the weighted-average method

First step is to calculate the Units transferred

Units transferred= 28000 + 72000 - 16000

Units transferred= 84,000

Second step is to calculate Equivalent units of material P

Equivalent units of material P= 84,000 + 16000

Equivalent units of material P= 100,000 Units

Now let calculate the Cost per Equivalent Units

Cost per Equivalent units of Material P

Beginning WIP Inventory Cost $120,000

Add Cost incurred during period $ 180,000

Total Cost to be accounted for $ 300,000

($300,000+$120,000)

÷Total Equivalent Units 100,000

=Cost per Equivalent Units $3.00

($300,000÷$100,000)

Therefore the Cost per equivalent unit for Material Q under the weighted-average method will be $3.00

above is a trading profit and loss with the balance sheet question

pls I need an urgent solution to this​

Answers

If that writing could be a little bit more clear I promise I would help. Could you type it up and send it so I can properly see it to do it.

how does the analysis for the supplier position and supplier preferencing model affect how a purchasing manager plans to do business with suppliers

Answers

Answer: The supplier position model aids the organization to rate their supplies based on the amount of spent when considering how and who it was supplied through

Explanation:

The supplier position model aids the organization to rate their supplies based on the amount of spent when considering how and who it was supplied through. It also gives a clue to the susceptibility level and the level of vulnerability that the business would be exposed to when the supplier fails.

In summary, it affects how a getting manager plans to try and do business with suppliers.

Landen's salary is $58,000 a year, and he contributes $4000 annually to his 401(k), while his employer matches 60%. What is his total salary please help me

Answers

Answer:

401k+4058.6

Explanation:

Landen's total salary is $64,400.

Landen's salary is $58,000 a year.He contributes $4000 annually to his 401(k).His employer matches 60% of his 401(k) contribution, which is $4000 × 0.6 = $2400.His total salary is $58,000 + $4000 + $2400 = $64,400.

Here is a breakdown of the calculation:

Salary: $58,000

401(k) contribution: $4000

Employer 401(k) match: $2400

Total salary: $58,000 + $4000 + $2400 = $64,400

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The cost of sales visits is a: Customer unit-level cost. Distribution-channel cost. Customer-sustaining cost. Sales-sustaining cost. Customer batch-level cost.

Answers

Answer:

Customer-sustaining cost

Explanation:

Cost of sales visits are costs associated with sales efforts. They can include direct labour, overheads, and direct materials.

This is regarded as a consumer sustaining cost because it is incurred in service to the customer.

Sales visits along with travelling cost are a way to ensure customer is satisfied and keeps coming back for more products.

Customer sustaining activities enables a business more effectively serve the customer with a view of maintaining their loyalty.

Which of the following is true of F a c e b o o k advertisements?
Question 13 options:

They're expensive and not well targeted.

They're affordable and highly targeted.

They're free and highly targeted.

They're expensive and only available to national brands.

Answers

they’re affordable and highly targeted.

I took the test and its They're affordable and highly  targeted 100%

If the direct materials price variance is $500 favorable, and the direct materials quantity variance is $250 unfavorable, the journal entry will include a: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) check all that apply Debit to direct materials price varianceunanswered Credit to direct materials price varianceunanswered Debit to direct materials quantity varianceunanswered Credit to direct materials quantity variance

Answers

Answer: Options B and C

Explanation:

To account for Direct Material Variance for for price and quantity, it is pertinent to note that Unfavorable variances should be  recorded as debits while favorable variances should be recorded as credits.

Therefore

If the direct materials price variance is $500 favorable, Then Credit should be made to direct material price variance and

If the direct materials quantity variance is $250 unfavorable, Then  a Debit should be made to direct materials quantity variance.

The journal entry should include credited to direct material price variance and debited to direct materials quantity variance.

The following information should be considered:

 The favorable price variance is credited to direct material price variance and unfavorable is debited .Unfavorable quantity variance is debited to direct materials quantity variance.

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The one-year forward rate of the British pound is quoted at $1.60, and the spot rate of the British pound is quoted at $1.63. Is the forward rate at a discount or a premium, and by what percentage

Answers

Answer:

discount; 1.8%

Explanation:

Calculation for the forward rate using this formula

forward rate=(F/S) - 1

Let plug in the formula

forward rate= ($1.60/$1.63) - 1

forward rate= -1.8 percent.

Therefore The forward DISCOUNT is 1.8 percent.

The forward rate at a discount or a premium:

Formula :

Forward rate=(F/S) - 1

 Forward rate= ($1.60/$1.63) - 1 Forward rate= -1.8 percent.

Therefore, the forward discount is 1.8 percent.

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The Production Order Quantity model in inventory management A. results in larger average inventory than an equivalent EOQ model B. uses Ordering Cost, not Setup Cost, in its formula C. relaxes the assumption of known and constant demand D. is appropriate when units are sold/used as they are produced

Answers

Answer: D. is appropriate when units are sold/used as they are produced

Explanation:

The economic production quantity model is sometimes referred to as the EPQ model and it is used to know the amount of goods or services that a company should order so that the total inventory costs can be reduced.

From the options given, it should be noted that the economic production order quantity is appropriate when units are sold/used as they are produced.

Therefore, the correct option is D.

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