{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Asset returns and prices

Asset returns and prices - Lecture#12 Asset Returns and...

Info icon This preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ1110, Spring 2008, Professor Ted 1 Lecture #12 Asset Returns and Prices: Term Structure and Tobin’s Q
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Econ1110, Spring 2008, Professor Ted 2 Cross-Sectional Differences in Yields Maturity – term structure Default risk Tax status
Image of page 2
Econ1110, Spring 2008, Professor Ted 3 Yields on December 9, 2005 3-Month T Bill 3.94 Corporate AAA - 10-Year 5.75 6-Month T Bill 4.27 Corporate A - 10-Year 5.88 5-Year T Note 4.43 Municipal AAA - 10-Year 3.90 10-Year T Bond 4.53 Municipal A - 10-Year 4.22 30-Year T Bond 4.73 CDs - 10-Year 6.00
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Econ1110, Spring 2008, Professor Ted 4 Yield Curve (November, various years) 0 2 4 6 8 10 12 14 16 3 month 6 month 1 year 2 year 5 year 7 year 10 year 20 year 30 year % per year 1980 1985 1989 2000 2001 2005 1995
Image of page 4
Econ1110, Spring 2008, Professor Ted 5 Facts About Yield Curve Fact 1 : Yield curve usually slopes upward Fact 2 : Long and short rates usually move together (see next slide) Justifies “the” interest rate Fact 3 : Short rates are more volatile than long rates Fact 3a : Yield curve slopes upward when rates are low; yield curve slopes downward when rates are high
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Econ1110, Spring 2008, Professor Ted 6 Interest Rates, Various Maturities January 1934 - November 2005 0 2 4 6 8 10 12 14 16 18 Jan-34 Jan-38 Jan-42 Jan-46 Jan-50 Jan-54 Jan-58 Jan-62 Jan-66
Image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern