Explain why the yield spread on corporate bonds versus Treasury bonds must always be positive. How do
Question:
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 64% (14 reviews)
The yield spread on corporate bonds versus Treasury bond must always be positive due to ris...View the full answer
Answered By
Ali Khawaja
my expertise are as follows: financial accounting : - journal entries - financial statements including balance sheet, profit & loss account, cash flow statement & statement of changes in equity -consolidated statement of financial position. -ratio analysis -depreciation methods -accounting concepts -understanding and application of all international financial reporting standards (ifrs) -international accounting standards (ias) -etc business analysis : -business strategy -strategic choices -business processes -e-business -e-marketing -project management -finance -hrm financial management : -project appraisal -capital budgeting -net present value (npv) -internal rate of return (irr) -net present value(npv) -payback period -strategic position -strategic choices -information technology -project management -finance -human resource management auditing: -internal audit -external audit -substantive procedures -analytic procedures -designing and assessment of internal controls -developing the flow charts & data flow diagrams -audit reports -engagement letter -materiality economics: -micro -macro -game theory -econometric -mathematical application in economics -empirical macroeconomics -international trade -international political economy -monetary theory and policy -public economics ,business law, and all regarding commerce
4.00+
1+ Reviews
10+ Question Solved
Related Book For
Introduction to Corporate Finance
ISBN: 978-0324657937
2nd edition
Authors: Scott B. Smart, William L Megginson
Question Posted:
Related Video
The yield to maturity (YTM) is the percentage rate of return for a bond assuming that the investor holds the asset until its maturity date. This video will give a complete tutorial on how to calculate Yield to Maturity on Microsoft Excel
Students also viewed these Corporate Finance questions
-
Explain why the yield of a bond that trades at a discount exceeds the bond's coupon rate?
-
Under what circumstances would the yield spread on different classes of debt obligations tend to be largest?
-
Would the yield spread on a corporate bond over a Treasury bond with the same maturity tend to become wider or narrower if the economy appeared to be heading toward a recession? Would the change in...
-
Modify Lookup to make a program LookupAndPut that allows put operations to be specified on standard input. Use the convention that a plus sign indicates that the next two strings typed are the...
-
List all employees who are not managers and are paid more than $1500.
-
A wet cooling tower is to cool 60 kg/s of water from 40 to 33oC. Atmospheric air enters the tower at 1 atm with dryand wet-bulb temperatures of 22 and 16oC, respectively, and leaves at 30oC with a...
-
The state of Arizona passed Proposition 200 by popular referendum. This law would require an individual to submit proof of citizenship as a condition of registering to vote. By requiring an...
-
Bauer Industries is an automobile manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks. Bauer plans to use a cost of capital of 12% to...
-
which a disk A of radius r rotates about a fixed vertical axis with angular displacement q1. A bar B of length h is pinned to A such that the axis of rotation is a radial line of A. (Note this is a...
-
10. On a contract, you have a choice of receiving $25,000 six years from now or $50,000 twelve years from now. At what implied compound annual interest rate should you be indifferent between the two...
-
Explain who benefits from the option to convert a bond into shares of common stock, and who benefits from the option to call a bond.
-
Explain why the height of the yield curve depends on inflation.
-
(a) From the use of Green's theorem in two dimensions show that the TM and modes in a waveguide defined by the boundary-value problems (8.34) and (8.36) are orthogonal in the sense that A E z E z...
-
In Figure 19.1, suppose the demand for the good was summarized by the equations: and that the marginal cost equals the average costs at $10 per unit. (a) Calculate the optimum market quantity in a...
-
What are some factors that help explain earnings differences across specialties? Why might the earnings differences persist over long periods of time?
-
If everyone chose to join an HMO, would average HMO expenditures per case tend to rise or fall? Would national health expenditures tend to rise or fall?
-
In the text, we considered only forgone income and tuition as costs of going to medical school. Enumerate other monetary and nonmonetary opportunity costs. Why are these opportunity costs relevant?
-
We often speak of how price rations goods. What are other rationing measures in clinics in which free care is provided?
-
(i). What are the effects on the balance sheet of the following transaction? Whatzis Ltd received $20 000 cash from a shareholder in return for $5000 in newly issued shares and promised to pay the...
-
(a) Find the equation of the tangent line to f(x) = x 3 at the point where x = 2. (b) Graph the tangent line and the function on the same axes. If the tangent line is used to estimate values of the...
-
1. Which of the following statements concerning bonds is incorrect? a. They involve blended payments of principal and interest. b. They have a fixed maturity date, at which time the issuer repays the...
-
Calculate the price of a bond with FV of $1,000, a coupon rate of 8 percent (paid semi-annually), and five years to maturity when: a. kb = 10 percent b. kb = 8 percent c. kb = 6 percent
-
Suppose that, several years ago, the Canadian government issued three very similar bonds; each has a $1,000 face value and a 10-percent coupon rate and will mature in five years. The only difference...
-
1. Compare and contrast the uses and relative advantages of X-rays, ultrasound, gamma camera and MRI in examining internal structures. 2. Evaluate the hazards of X-rays, ultrasound, gamma camera and...
-
What is the missing line of code? my_list = ["one", "two", "three"] print(x)
-
A cylindrical capacitor has an inner conductor of radius 2.2 mm and an outer conductor of radius 3.5 mm. The two conductors are separated by vacuum, and the entire capacitor is 2.4 m long. Part A...
Study smarter with the SolutionInn App