This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: If we want to get some idea about a default premium over time between two specific assets, we can ... (Read 57 times)

bclement10

  • Hero Member
  • *****
  • Posts: 560
on: Jul 10, 2018
If we want to get some idea about a default premium over time between two specific assets, we can compare the returns on short-term or medium-term bonds with those on large company stocks.
 
  Indicate whether the statement is true or false.

Question 2

Which of the four interest rate components had the greatest average percentage in the period from 1950-1999?
 
  A) Real rate
  B) Inflation premium
  C) Historical interest rates
  D) Default premium


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

HandsomeMarc

  • Sr. Member
  • ****
  • Posts: 360
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: FALSE
Explanation: If we want to get some idea about a default premium over time between two specific assets, we can compare the returns with top-rated corporate bonds and U.S. government bonds.

Answer to Question 2

Answer: B
Explanation: B) For the 50-year period from 1950-1999, inflation averaged 4.05, the real rate averaged 1.18, the maturity premium averaged 1.28 (for twenty-year maturity differences), and the default premium averaged 0.49 (for AAA over government bonds).


bclement10

  • Member
  • Posts: 560
Reply 2 on: Jul 10, 2018
Wow, this really help

dreamfighter72

  • Member
  • Posts: 355
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

Did you know?

Cutaneous mucormycosis is a rare fungal infection that has been fatal in at least 29% of cases, and in as many as 83% of cases, depending on the patient's health prior to infection. It has occurred often after natural disasters such as tornados, and early treatment is essential.

Did you know?

Lower drug doses for elderly patients should be used first, with titrations of the dose as tolerated to prevent unwanted drug-related pharmacodynamic effects.

Did you know?

Asthma-like symptoms were first recorded about 3,500 years ago in Egypt. The first manuscript specifically written about asthma was in the year 1190, describing a condition characterized by sudden breathlessness. The treatments listed in this manuscript include chicken soup, herbs, and sexual abstinence.

Did you know?

The average human gut is home to perhaps 500 to 1,000 different species of bacteria.

Bronfenbrenner’s model of the ecological-systems approach to studying development. He suggested that Bronfenbrenner’s model of the ecological-systems approach to studying development. He suggested that
Time Line of Human History From Upper Paleolithic Period to the Present Time Line of Human History From Upper Paleolithic Period to the Present
Barenaked Ladies - Lovers in a Dangerous Time Barenaked Ladies - Lovers in a Dangerous Time
The Gender Pay Gap Over Time: What Percentage of Men's Income Do Women Earn? The Gender Pay Gap Over Time: What Percentage of Men's Income Do Women Earn?
Selected Pediatric Drugs for Which Specific Indications and Dosage Guidelines Exist Selected Pediatric Drugs for Which Specific Indications and Dosage Guidelines Exist
Time homework Time homework
Video: Pressure Flow Model Animation

For a complete list of videos, visit our video library