1. The segmented market is one of the theories that can be used to explain the relationship between maturity and the annualised yield on securities. explain the limitation behind this theory.
2. Consider the following three bond quotes: a Treasury note quoted at 97.24, a corporate bond quoted at 103.75, and a municipal bond quoted at 102.40. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars?
Treasury bond =
Corporate bond =
Municipal bond =