Like components, patterns are ready-to-use and need not be adapted to specific problems
Indicate whether the statement is true or false
FALSE
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Consider the bond market to be in equilibrium according to our complete theory of the term structure of interest rates. You observe the following interest rates available today on bonds with differing times to maturity. (You may ignore transactions costs.)
Time to maturity Yield to maturity 1 year 5.0% 2 years 7.0% 3 years 7.5% The term premium for the two-year bond is the extra yield to maturity paid on a two-year bond compared with buying two separate one-year bonds (one today and another after one year). You believe that the term premium on the two-year bond is 0.5 percent.The term premium for the three-year bond is the extra yield to maturity paid on a three-year bond compared with buying three separate one-year bonds (one today, another after one year, and another after two years). You believe that the term premium on the three-year bond is 1.0 percent.Given your beliefs about the term premiums on two-year and three-year bonds, calculate the interest rates on one-year bonds that you expect to prevail one year from now and two years from now. In other words, what do you expect to be the yield to maturity on a one-year bond one year from now and what do you expect to be the yield to maturity on a one-year bond two years from now? Explain and show all your work. What will be an ideal response?
Practical capacity is theoretical or ideal capacity reduced by normal and anticipated work stoppages, such as machine breakdowns
Indicate whether the statement is true or false
Which of the following is a supply chain decision that is not easy to change?
A. the decision about transportation B. the decision about location C. the decision about information sharing D. the decision about inventory
Frictionless Lubricant Corporation and Grease Inc are the principal suppliers of their product in their market. They agree that Frictionless will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under anti trust law, this market division is most likely? A) a per se violation
B) a violation only if their competitors make similar deals. C) a violation only if their customers agree to honor the deal. D) not a violation.