The term structure for zero-coupon bonds is currently:

Maturity (Years)

YTM (%)

1

4.9%

2

5.9

3

6.9

Next year at this time, you expect it to be:

Maturity (Years)

YTM (%)

1

5.9%

2

6.9

3

7.9

a.

What do you expect the rate of return to be over the coming year on a 3-year zero-coupon bond?

b.

Under the expectations theory, what yields to maturity does the market expect to observe on 1- and 2-year zeros at the end of the year?

c.

Is the market's expectation of the return on the 3-year bond greater or less than yours?

Aborrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments. the first two years of the loan have a "teaser" rate of 4%, after that, the rate can reset with a 5% annual payment cap. on the reset date, the composite rate is 6%. what would the year 3 monthly payment be?

1. what is the amount of interest earned after two years on a $100 deposit paying 4 percent simple interest annually? $8.00 $4.08 $8.16 $4.00 2. what is the amount of compound interest earned after three years on a $100 deposit paying 8 percent interest annually? $24.00 $8.00 $16.64 $25.97 3. a business just took out a loan for $100,000 at 10% interest. if the business pays the loan off in three months, how much did the business pay in interest? $2,500.00 $10.00 $250.00 $10,000.00 4. what is the annual percentage yield (apy) for a deposit paying 5 percent interest with monthly compounding? 5.00% 5.12% 79.59% 0.42%

Pam is a low-risk careful driver and fran is a high-risk aggressive driver. to reveal their driver types, an auto-insurance company a. refuses to insure high-risk drivers b. charges a higher premium to owners of newer cars than to owners of older cars c. offers policies that enable drivers to reveal their private information d. uses a pooling equilibrium e. requires drivers to categorize themselves as high-risk or low-risk on the application form