## Question

###### Tegrity standards. Question 1 5 pts Assume that a 3-year Treasury security yields 5.10%. Also assume...

tegrity standards. Question 1 5 pts Assume that a 3-year Treasury security yields 5.10%. Also assume that the real risk-free ratę (r") is 0.75%, and inflation is expected to be 2.25% annually for the next 3 years. In addition to inflation, the nominal interest rate also includes a maturity risk premium (MRP) that reflects interest rate risk. What is the maturity risk premium for the 3-year security? Round your answer to two decimal places Your answer should be between 0.00 and 2.92, rounded to 2 decimal places, with no special characters.

## Answers

Yield on 3-year Treasury Security = 5.10%

Real Risk-free Rate = 0.75%

Inflation Premium = 2.25%Yield on 3-year Treasury Security = Real Risk-free Rate + Inflation Premium + Maturity Risk Premium

5.10% = 0.75% + 2.25% + Maturity Risk Premium

5.10% = 3.00% + Maturity Risk Premium

Maturity Risk Premium = 2.10%So, maturity risk premium for the 3-year security is 2.10%

#### Similar Solved Questions

1 answers

##### On January 1 Primary Manufacturing had a beginning balance in Work-in - Process Inventory of $81,600...

On January 1 Primary Manufacturing had a beginning balance in Work-in - Process Inventory of $81,600 and a beginning balance in Finished Goods Inventory of $22,000. During the year, Primary incurred manufacturing costs of $350,000. In addition, the following transactions occurred during the year: Jo...

1 answers

##### Pareto Chart and Cost of Quality Report for a Manufacturing Company The president of Mission Inc....

Pareto Chart and Cost of Quality Report for a Manufacturing Company The president of Mission Inc. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to gain a better insight into these costs. The result of the ...

1 answers

##### Do part a),b),c) & Taking it further P18-10B The following ratios are available for Rogers Communications...

do part a),b),c) & Taking it further P18-10B The following ratios are available for Rogers Communications Inc. and Shaw Communications Inc. Evaluat for a recent year: (LO 4, Liquidity Rogers Shaw Current ratio 0.48:1 0.95:1 Acid-test ratio 0.36:1 0.81:1 Receivables turnover 8.3 times 10.7 times ...

1 answers

##### There are 5 companies, each sells a bond that will pay $20 in one month. For...

There are 5 companies, each sells a bond that will pay $20 in one month. For each company the bond costs $10. All of these companies have probability .01 of default, and whether one defaults is independent from whether any of the others default. a) Let X be the number of companies that default. What...

1 answers

##### 1. Discuss the issue of the uninsured in the United States? 2. What is NACCHO? What...

1. Discuss the issue of the uninsured in the United States? 2. What is NACCHO? What is their role in healthcare?...

1 answers

##### Periodically, customers of a financial services company are asked to evaluate the company's financial consultants and...

Periodically, customers of a financial services company are asked to evaluate the company's financial consultants and services. Higher ratings on the client satisfaction survey indicate better service, with 7 the maximum service rating. Independent samples of service ratings for two financial co...

1 answers

##### A +9 B Four small spheres (A, B, C, and D), each of mass m=0.02g, are...

A +9 B Four small spheres (A, B, C, and D), each of mass m=0.02g, are arranged as shown on the figure, all located a distance d=3.00cm from a point P. Spheres A, B, and C each carry a charge of +5.00nC, while sphere D carries a charge of -5.00nC. d +9 d a) When all the spheres are fixed at their pos...

1 answers

##### Calculate Gross Profit Ratios, Expense ratios, and Net Profit Margin Ratios Corporation 1 Most current Year...

Calculate Gross Profit Ratios, Expense ratios, and Net Profit Margin Ratios Corporation 1 Most current Year % Prior Year % Net Revenues cost of Goods Sold Gross Profit Expenses: Net Income 38...

1 answers

##### An antireflection coating is designed with a thickness of a quarter of the wavelength of the...

An antireflection coating is designed with a thickness of a quarter of the wavelength of the light traveling in the film. (a) How many wavelengths further does the light reflected from the bottom surface of the film travel than that reflected from the top surface? (b) Does this produce constructive ...

1 answers

##### Eca Problem 3. Write down f(x) = as a composition f = goh of an expo-...

eca Problem 3. Write down f(x) = as a composition f = goh of an expo- nential function g and a power function h. Then apply chain rule to compute derivative of f. (3+4 points) Bonus Points: For the functions g, h found in Problem 3 above, write down the composition h o g, composition of them in the ...

1 answers

##### Sandhill Co. uses a perpetual inventory system reports the following for the month of June. Unit...

Sandhill Co. uses a perpetual inventory system reports the following for the month of June. Unit Cost Date Explanation Units Total Cost $5 $575 June 1 Inventory 115 12 Purchases 345 2,070 6 Purchases 23 190 1,330 7 30 200 Inventory LLIE! Calculate the average cost per unit, using a perpetual invento...

1 answers

##### Example Exercise Journal Entry for owner's Withdrawal Prepare a journal entry on December 29 for the...

Example Exercise Journal Entry for owner's Withdrawal Prepare a journal entry on December 29 for the payment of $12,000 to the owner of Smartstaff Consulting Services, Dominique Walsh, for personal use....

1 answers

##### 1. A fish pond is to be dug into a lawn so that it w hold 10 kL of water (note that 1 kL 1 m3). F...

1. A fish pond is to be dug into a lawn so that it w hold 10 kL of water (note that 1 kL 1 m3). For æsthetic reasons, the pond is to be cylindrical in shape, with vertical sides. For practical reasons, the pond cannot be more than 1 m deep and must be at least 0.3 m deep (a) (i) Write an expre...

1 answers

##### What is the total pressure in a closed vessel containing NH3 at 208 torr, CO at...

What is the total pressure in a closed vessel containing NH3 at 208 torr, CO at 152 torr and O2 at176 torr? [5 pts.] What is the molar mass of an unknown gas if 0.948 g of the gas occupies 2.5 L af 65°C and 250. torr? [5 pts.]...

1 answers

##### A jeweler wants to melt a ring. Assume the ring is pure gold and has a...

A jeweler wants to melt a ring. Assume the ring is pure gold and has a mass of 37 grams and the initial temperature of the ring is 55 degrees C. How much energy is required to melt the ring? (Use the attached table for needed constants) Multiple Choice A) 7,184.29 B) 2,522.29 C) J 4,853.29 J D) 2,33...

1 answers

##### Assuming normal speed distribution, if d is defined as +2 km/h, standard deviation is as 5km/h,...

Assuming normal speed distribution, if d is defined as +2 km/h, standard deviation is as 5km/h, and the mean speed needs to be determined (1.e. 85th percentile speed, ) at a significance level of 0.05, determine the minimum sample size required. Select one: O a. 37 O b. 72 O c. None O d. 30...

1 answers

##### 47 47) Researchers are using heirloom tomato genetic analysis to A) find the last common ancestor...

47 47) Researchers are using heirloom tomato genetic analysis to A) find the last common ancestor of all extant tomatoes B) stop the tomato homworm pest C) clone tomato genes into grains, making pasta with sauce included D) genetically modify hot house tomatoes for better taste...