Homework: Corporate Finance
For this homework, you will examine bond yields and interest rates, real interest rate and five premiums that investors demand as compensation for risk, expected future inflation, interest rate risk, default risk, taxability and lack of liquidity. Define each of these concepts and explain how they influence investors. The product will be a paper that is 1 to 2 pages; a reference list should also be included on a new page after the body of your paper.
The requirements for your 2 Homework are:
a. Demonstrate that bond yields and interest rates reflect the effect of six different things.
b. Define the real interest rate and five premiums that investors demand as compensation for risk.
c. Define each of these concepts: expected future inflation, interest rate risk, default risk, taxability and lack of liquidity
d. Explain how each of these concepts influence investors: expected future inflation, interest rate risk, default risk, taxability and lack of liquidity Please see the rubric on the next page for specific information about grading details.
Format your homework according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.