1 An investor expects the value of a $1,000 investment to triple
... 9. A particular product has a unit price of $3, and the firm has fixed costs of $1,500 and variable costs of $2 per unit. What is the break-even level of output for this product? Show your calculations. Break even level of output =1500/1 = 1500 units Break even point in dollars = 1500*3 = 4500 ...
... 9. A particular product has a unit price of $3, and the firm has fixed costs of $1,500 and variable costs of $2 per unit. What is the break-even level of output for this product? Show your calculations. Break even level of output =1500/1 = 1500 units Break even point in dollars = 1500*3 = 4500 ...
Weekly Market Update - O`Meara Financial Group
... Today, we have a rising or “steep” yield curve, which means short-term interest rates are lower than longer-term rates. In other words, the graph of these rates slopes upward to the right. At the short-end of the yield curve, the Federal Reserve is holding the benchmark fed funds interest rate near ...
... Today, we have a rising or “steep” yield curve, which means short-term interest rates are lower than longer-term rates. In other words, the graph of these rates slopes upward to the right. At the short-end of the yield curve, the Federal Reserve is holding the benchmark fed funds interest rate near ...
Chapter 2
... Understand how the supply and demand for money and credit affect (and are affected by) the economy and the general level of interest rates Understand how yields on individual debt instruments are determined Understand why securities of different maturities may have different yields ...
... Understand how the supply and demand for money and credit affect (and are affected by) the economy and the general level of interest rates Understand how yields on individual debt instruments are determined Understand why securities of different maturities may have different yields ...
The bright side of higher rates
... Interest rates on U.S. government bonds have increased with market expectations of a Federal Reserve rate hike in December. Rising rates on longer-term bonds reflect optimism about the U.S. economy — growth is accelerating and consumer prices show signs of increasing following an extended period of ...
... Interest rates on U.S. government bonds have increased with market expectations of a Federal Reserve rate hike in December. Rising rates on longer-term bonds reflect optimism about the U.S. economy — growth is accelerating and consumer prices show signs of increasing following an extended period of ...
Yield to Maturity
... Although YTM often shows a higher yield than YTW, there is a risk that the bonds may be called, resulting in an investment return that would be the (lower) YTW and not the YTM. ...
... Although YTM often shows a higher yield than YTW, there is a risk that the bonds may be called, resulting in an investment return that would be the (lower) YTW and not the YTM. ...
Management`s primary goal is to maximize stockholder
... very low expected short-term inflation. While actual inflation had dropped significantly, perhaps investors believed that low inflation was not likely to persist for long and thus rates for Treasury maturities five years and beyond were much higher. In February 1998 long-term rates had declined 120 ...
... very low expected short-term inflation. While actual inflation had dropped significantly, perhaps investors believed that low inflation was not likely to persist for long and thus rates for Treasury maturities five years and beyond were much higher. In February 1998 long-term rates had declined 120 ...
Yield curve
In finance, the yield curve is a curve showing several yields or interest rates across different contract lengths (2 month, 2 year, 20 year, etc...) for a similar debt contract. The curve shows the relation between the (level of) interest rate (or cost of borrowing) and the time to maturity, known as the ""term"", of the debt for a given borrower in a given currency. For example, the U.S. dollar interest rates paid on U.S. Treasury securities for various maturities are closely watched by many traders, and are commonly plotted on a graph such as the one on the right which is informally called ""the yield curve"". More formal mathematical descriptions of this relation are often called the term structure of interest rates.The shape of the yield curve indicates the cumulative priorities of all lenders relative to a particular borrower, (such as the US Treasury or the Treasury of Japan) or the priorities of a single lender relative to all possible borrowers. With other factors held equal, lenders will prefer to have funds at their disposal, rather than at the disposal of a third party. The interest rate is the ""price"" paid to convince them to lend. As the term of the loan increases, lenders demand an increase in the interest received. In addition, lenders may be concerned about future circumstances, e.g. a potential default (or rising rates of inflation), so they offer higher interest rates on long-term loans than they offer on shorter-term loans to compensate for the increased risk. Occasionally, when lenders are seeking long-term debt contracts more aggressively than short-term debt contracts, the yield curve ""inverts"", with interest rates (yields) being lower for the longer periods of repayment so that lenders can attract long-term borrowing.The yield of a debt instrument is the overall rate of return available on the investment. In general the percentage per year that can be earned is dependent on the length of time that the money is invested. For example, a bank may offer a ""savings rate"" higher than the normal checking account rate if the customer is prepared to leave money untouched for five years. Investing for a period of time t gives a yield Y(t).This function Y is called the yield curve, and it is often, but not always, an increasing function of t. Yield curves are used by fixed income analysts, who analyze bonds and related securities, to understand conditions in financial markets and to seek trading opportunities. Economists use the curves to understand economic conditions.The yield curve function Y is actually only known with certainty for a few specific maturity dates, while the other maturities are calculated by interpolation (see Construction of the full yield curve from market data below).