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NEW QUESTION: 1
A 10-year government zero coupon bond is currently yielding 6.4%. If in 10 years, you expect a two year government zero coupon bond to provide a yield of 10.7%, what must the yield be on a 12-year zero coupon bond today in order for you to be indifferent between the 10-year bond and the 12-year bond?
A. 8.4%
B. 7.1%
C. 7.7%
Answer: B
Explanation:
To be indifferent, both securities must yield the same total dollar amount at the end of the investment horizon, which in this case is 12 years.
Option I: Buy a 10-year bond and then a 2-year bond. Option II: Buy a 12-year bond.
When indifferent: Option I = Option II
(1.064)10 (1.107)2 = (1 + x)12= 7.1%
where x is the yield on the 12-year bond.
NEW QUESTION: 2
Human resources and payroll are separate departments. Which of the following combinations would provide the best segregation of duties?
A. Human resources personnel add employees, and payroll personnel process hours and enter employee bank account numbers. Paychecks are automatically deposited in the employee's bank account.
B. Human resources personnel add employees, payroll personnel process hours, and human resources personnel deliver paychecks to employees.
C. Human resources personnel add employees, review and submit payroll hours to the payroll department for processing, and deliver paychecks to employees.
D. Payroll personnel add employees and enter employee bank account numbers but process hours only as approved by the human resources department. Paychecks are automatically deposited in the employee's bank account.
Answer: A
NEW QUESTION: 3
Which errdisable recovery command option enables a device to recover from a potential loop condition?
A. dtp-flap
B. security-violation
C. link-flap
D. udld
Answer: D
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