1. What does the following yield curve tell us?Treasury yield curve for January 20, 2006.Maturity Yield (%)1 month3.953 months 4.356 months 4.481 year4.442 years4.373 years4.325 years4.317 years4.3210 years 4.3720 years 4.59

An yield curve is the one that represents interest rate paid at different different maturity…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please answer fast please arjent please asap pl answer
Please solve part E Only
(c) Let r(t), t > 0, be an instantaneous interest rate which is a non-decreasing and differentiable. Show that the associated yield curve 7(t) is also non-decreasing.
14.) P 500 is deposited at the end of each month at a certain interest rate compounded monthly. The present value is P 10,622 and the future value after n months is P 13,487. Find the value of n. Select one: a. 18 b. 24 c. 12 d. 36
4. Money market instruments: Repurchase agreements Which of the following are typical repurchase agreement denominations? Check all that apply. $100,000 $7,500,000 $10,000,000 $100,000,000 Which of the following are characteristics of repurchase agreements? Check all that apply. Their maturities are normally between 1 and 15 days, 1 month, 3 months, or 6 months. The size of the repo market is approximately $5 trillion. Most repo transactions are backed by commercial paper or NCDs. There is no secondary market for repurchase agreements. Suppose Ginny initially purchased securities at a price of $49,050,000 while agreeing to sell them back to the original owner at a price of $50,000,000 at the end of a 3-month period. Assuming a 360 day year, the yield (or repo rate) on this repurchase agreement is: 7.44% 7,75% 7.98% 8.29%
You purchase a 3-year $1000 face value bond that has a coupon rate of 5% while the market interest rate is also 3%. What is the price, current yield and YTM? What is the market interest rate drops to 4% right after you purchase the bond? What is rises to 6%
Q 20
4. Jenna has just entered collage and has decided to quit smoking. She wants to regain her health and save money in the process. She smokes two packs a day, which translates into roughly $30 per week. Suppose she makes weekly deposits of this money into a bank account that pays annual interest of 10%, compounded continuously. What will be balance of Jenna's account when she retires in 47 years? (Hint: If an initial amount of S. dollars is deposited in a bank that pays an annual interest of r, compounded continuously, then the future value, s(t), of the account satisfy the initial-value problem ds/dt=rs, S(0)-S,. Moreover, if deposits amounting to d dollars per year (made uniformly throughout the year) are made into the above account, then the future value of this new account, called an annuity, will satisfy dS/dt=rs+d, S(0)=S..
4. Which of the following alternatives would you choose, assuming an interest rate of 10% compounded annually? Alternative 1: Receive $100 today. Alternative 2: Receive $120 two years from now. Alternative 3: Receive $170 five years from now.
Compute the specified quantity. During a month, $10,000 6-month T-bills were sold at a discount rate of only 0.45%. What was its simple annual yield decimal places.) r= 58.06 Need Help? * % Read It HINT [See Example 6.] (Round your answer to four

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1. What does the following yield curve tell us? Treasury yield curve for January 20, 2006. Maturity Yield (%) 1 month 3.95 3 months 4.35 6 months 4.48 1 year 4.44 2 years 4.37 З years 4.32 5 years 4.31