Interest Rate Reinvestment Risk
Explain the term Interest Rate Reinvestment Risk in detail?
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Interest Rate Reinvestment Risk - The YTM computation supposes that the investor reinvests all coupons obtained from a bond at a rate equivalent to the evaluated YTM on that bond, thus earning interest on interest over the life of bond at evaluated YTM. In effect, this computation supposes that the reinvestment rate is the yield to maturity. When the investor spends the coupons, or reinvests them at a rate distinct from the supposed reinvestment rate, the realized yield which will really be earned at the termination of the investment in the bond will vary from the promised YTM. And, actually coupons nearly always will be reinvested at rates higher or lower than the evaluated YTM, resultant in a realized yield which varies from the promised yield. This provides rise to reinvestment rate risk.
The theory about land derives its value primarily by how much its location conserves on transaction costs is attributable to: (a) Johann H. von Thünen. (b) Adam Smith. (c) Richard Cantillon. (d) David Ricardo. (e) Reverend Thomas Robert (“B
The purely competitive model means that competition in both output and resource markets yields a distribution of income that is proportional to the: (w) numbers of people in specific households. (x) effort and leisure sacrificed throu
Marginal revenue is NOT: (i) similar as average revenue or price for a competitive firm. (ii) identical to the price of output for firms along with monopoly power. (iii) specified by (change in TR)/ (change into Q) for all firms. (iv) derived by the d
Refer to the given diagram. As it associate to production possibilities analysis, the law of increasing opportunity cost is reflected in curve:1) A 2) B 3) C 4) D Q : Multimarket Monopoly A monopolist A monopolist operates in two separated markets. The inverse demand functions ofthose markets are given by and where arethe quantities supplied to these markets, respectively. The total cost function facedby the monopolist is &nbs
A monopolist operates in two separated markets. The inverse demand functions ofthose markets are given by and where arethe quantities supplied to these markets, respectively. The total cost function facedby the monopolist is &nbs
The union shop agreement needs that the worker: (1) Join the labor union prior to beginning to work. (2) Pay union dues even when selecting not to join union. (3) Join the union soon subsequent to being hired. (4) Freely select to join or not join union.
The minimum revenue which will induce a firm to produce a specified output in place of shutting down into the short run is the: (a) maximum such consumers are willing to pay for that output. (b) total variable cost of producing such output. (c) short-
I have a problem in economics on short run demand. Please help me in the following question. In short run, the demand mainly depends most on: (1) Supply. (2) Costs of production. (3) Consumer tastes and preferences. (4) Technology. (5) Resource access
Economies of Scale: ‘Economies’ means benefits. The scale refers to the size of unit. ‘Economies of Scale’ refers to the cost benefits due to
While marginal cost is positive, a profit maximizing monopolist will control where marginal revenue is: (w) positive. (x) negative. (y) zero. (z) positive, zero, or negative, depending upon elasticity of demand. Discover Q & A Leading Solution Library Avail More Than 1428235 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1941127 Asked 3,689 Active Tutors 1428235 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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