Does buying and selling of debt instruments maturing in one year or less, a characteristic of money market?
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Does buying and selling of debt instruments maturing in one year or less, a characteristic of
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- Which of the following refers to the ratio of the interest to the principal repayment on an annual unpaid loan? A. it increases as the loan gets older О в. it decreases as the loan gets older O c. it remains constant over the life of the loan O D. it changes according to the level of market interest rates during the life of the loanWhat is the overall assement of the company's credit risk (explain)? Is there any difference between the two years?What do you have to do to the interest rate and years of maturity if a bond pricing problem tells you that interest is compounded quarterly?
- What is the typical Coupon rate for Treasury bills? A. Can be calculated using the TVM equation based on YTM. B. Adjusted according to the Inflation rate. C. It does not pay any coupon value, so 0% coupon rate. D. It differs from one year to another based on multiple factors.Which of the following is an instrument of monetary policy? The interest rate on three-month Treasury bills The mortgage interest rate The budget deficit The discount rateWhat are the Effects of Maturity on Monthly Payments on Fully Amortizing Loans?
- What current rate environment is the US currently in by historical standards? (LOW, HIGH, AVERAGE) What are the expectations for rates in the US over the next year? How will this impact businesses borrowing money (debt)? What do you observe in day-to-day life regarding current inflation?Which interest rate is used on very short term loans from one bank to another? A. PRIME INTEREST RATE B.TREASURY BILL RATE C. COMMERCIAL PAPER RATE D. FED FUNDS RATEhow and why interest rates will change over the next three months. Why forecasts of future interest rates are important? You may explain how changes in the factors that cause changes in interest rates influence investors its decisions in the credit markets.
- Accounting for Fair Value Hedge: Interest Rate Swap On January 1 of Year 1, Innovative Lab issued a 4-year $50,000 note to a local bank with fixed interest payments based on 6%, payable annually on December 31. To hedge the risk of a fixed interest payment, Innovative Lab entered into a 4-year interest rate swap agreement on January 1 of Year 1, calling for interest payments tied to a designated benchmark interest rate to a counterparty and receipt of interest based on 6%, negotiated at a notional amount of $50,000. The settlement date for the net cash payment is on December 31 of each year. The following table provides additional information related to the interest rate swap as forecasted over the next 4 years. Fair value: Interest rate swap Fair value: note payable Benchmark interest rate Required Dec. 31, Year 1 Dec. 31, Year 2 Dec. 31, Year 3 Dec. 31, Year 4 $200 $0 $50,200 4.2% $400 $50,400 4.0% $0 $50,000 5.2% $50,000 5.8% a. Record the required journal entries for Year 1, Year…What is the difference in the interest rates on commercial paper for financial firms versus nonfinancial firms? Explain possible reasons for the difference. What is the most recent interest rate reported for, 1-year, 2-year, 5-year, 10-year, and 30-year maturity Treasuries? Provide the graph of the rates over the maturity (the yield curve) and interpret the shape of the yield curve. 2. The most famous financial market in the world is the New York Stock Exchange (NYSE). Visit the NYSE website and then answer the following questions: ● What is the mission of the NYSE? ● What would be the fee for a firm with five million common shares outstanding?Which risk ratios best answer each of the following financial questions? a. How quickly is a company able to collect its receivables? b. How quickly is a company able to sell its inventory? c. Is the company able to make interest payments as they become due?