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 84 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
Gracias!

Dinolord

  • Member
  • Posts: 313
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

According to the FDA, adverse drug events harmed or killed approximately 1,200,000 people in the United States in the year 2015.

Did you know?

Signs of depression include feeling sad most of the time for 2 weeks or longer; loss of interest in things normally enjoyed; lack of energy; sleep and appetite disturbances; weight changes; feelings of hopelessness, helplessness, or worthlessness; an inability to make decisions; and thoughts of death and suicide.

Did you know?

Certain rare plants containing cyanide include apricot pits and a type of potato called cassava. Fortunately, only chronic or massive ingestion of any of these plants can lead to serious poisoning.

Did you know?

About 60% of newborn infants in the United States are jaundiced; that is, they look yellow. Kernicterus is a form of brain damage caused by excessive jaundice. When babies begin to be affected by excessive jaundice and begin to have brain damage, they become excessively lethargic.

Did you know?

Most women experience menopause in their 50s. However, in 1994, an Italian woman gave birth to a baby boy when she was 61 years old.

Relationship of the 12 cranial nerves to specific regions of the brain. Relationship of the 12 cranial nerves to specific regions of the brain.
This portrait of Thomas Jefferson is considered an accurate likeness, painted when he was thirty-sev This portrait of Thomas Jefferson is considered an accurate likeness, painted when he was thirty-sev
For a time Dr. Seuss—Theodor Seuss Geisel—drew political cartoons. This one, published in ... For a time Dr. Seuss—Theodor Seuss Geisel—drew political cartoons. This one, published in ...
Press into points along the neck with your thumb, one side at a time. Apply circular friction to ... Press into points along the neck with your thumb, one side at a time. Apply circular friction to ...
The frequency of aneuploidy changes dramatically over developmental time. Between 6 to 8 weeks and 2 The frequency of aneuploidy changes dramatically over developmental time. Between 6 to 8 weeks and 2
The Cosmic Calendar: Concepts of Time The Cosmic Calendar: Concepts of Time
Video: Effect of the environment on coat color in the Himalayan rabbit Animation

For a complete list of videos, visit our video library