{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

407M02Sol_add

407M02Sol_add - is probably quite low although the YTM will...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
MIT Sloan School of Management J. Wang 15.407 E52-456 Fall 2003 Midterm 2002 Answers to 1(d) and 1(f) 1(d): Uncertain: In terms of riskless bonds, higher yield to maturity means higher average returns. However for risky bonds that does not need to be true, although that will generally hold. For example, if a company is almost certain to default on its payment, you actual return
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: is probably quite low although the YTM will be really high. 1(e) False: The market price of a share of stock equals the discounted value of the stream of future dividends per share, using the appropriate discount rate. 1(f) False: If the net convenience yield is higher than the riskless interest rate, the future price will exhibit backwardation. 1...
View Full Document

  • Fall '03
  • Wang
  • Dividend yield, MIT Sloan School of Management, Massachusetts Institute of Technology, Sloan School of Management, higher average returns, MIT Sloan School

{[ 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