One-year treasury bills currently earn 3. 25 percent. You expect that one year from now, one-year treasury bill rates will increase to 3. 45 percent and that two years from now, one-year treasury bill rates will increase to 3. 95 percent. The liquidity premium on two-year securities is 0. 05 percent and on three-year securities is 0. 15 percent. If the liquidity theory is correct, what should the current rate be on three-year treasury securities?.

Question

05-12-2022
Mathematics

Answered

Find expert answers and community insights on IDNLearn.com. Get prompt and accurate answers to your questions from our community of experts who are always ready to help.

One-year treasury bills currently earn 3. 25 percent. You expect that one year from now, one-year treasury bill rates will increase to 3. 45 percent and that two years from now, one-year treasury bill rates will increase to 3. 95 percent. The liquidity premium on two-year securities is 0. 05 percent and on three-year securities is 0. 15 percent. If the liquidity theory is correct, what should the current rate be on three-year treasury securities?.

Sagot :

Thank you for joining our conversation. Don't hesitate to return anytime to find answers to your questions. Let's continue sharing knowledge and experiences! Find clear answers at IDNLearn.com. Thanks for stopping by, and come back for more reliable solutions.

Let G(x)=x-3 And H(x)=x^2+6 Find (h O G) (1)

Consider Two Linear Transformations Y = T(x) And Z = L(y), Where T Goes From R^m To R^p And L Goes From R^p To R^n. Is The Transformationz = L(T(x)) Linear As W

Two Diverging Light Rays, Originating From The Same Point, Have An Angle Of 5° Between Them. After The Rays Reflect From A Plane Mirror, What Is The Angle Betwe

The Commissariat Established By Frederick William In Prussia Became A. The Overseer Of The Army. B. An Agency Of Civil Government. C. Both A Military And Civil

When MgCO3(s) Is Strongly Heated, It Produces Solid MgO As Gaseous CO2 Is Driven Off.Does The Oxidation Number Of Carbon Change Upon The formation Of CO2?

Can U Tell Me How To Solve This Promblem 4/7 Plus 3/7

Which Of The Following Expressions Does Not Equal: The Sixth Root Of 81x^4y^8 a. (3xy^2)^2/3 b. (3x)^2/3y^4/3 c. (3x^2y^4)^1/3 d. Cube Root Of 9x^2y^4

Consider Two Linear Transformations Y = T(x) And Z = L(y), Where T Goes From R^m To R^p And L Goes From R^p To R^n. Is The Transformationz = L(T(x)) Linear As W

Which Foods Earthworms Can Digest?

Smecloudbird18idn Smecloudbird18idn · Answer 1 · 2022-12-17T12:26:23-05:00

3-year treasury securities as calculated from the data will now have a rate of 3.70%.

Current interest rate is calculated as Current Interest Rate + Liquidity Premium.

Average interest for 3 Year = (3.45% + 3.95% +3.25%)/3 = 3.55

3 year security liquidity premium = 0.15%

3 year Treasury security's current rate is 3.55% +0.15%.

= 3.70%

Therefore, The current rate be on 3-year treasury securities is 3.70%.

Interest is the fee paid for having access to borrowed funds. While the interest rate used to compute interest is often reported as an annual percentage rate, interest expense or revenue is sometimes expressed as a dollar figure (APR).

The compensation a lender or financial organisation receives for giving out money is called interest. The percentage of a stockholder's ownership in a corporation that is also referred to as interest.

To learn more about rate

brainly.com/question/13446339

#SPJ4

Sagot :

Other Questions