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NEW QUESTION: 1
Howard Mayfield, a portfolio manager with Churn Brothers Brokerage, is examining a new issue of
7 -year corporate notes. These notes have been issued by Microscam, and feature an 8.00% per year coupon rate. These bonds are trading at a yield of 7.34% per year. The yield on the on-the-run 5-year
Treasury note is 5.12% per year.
What are the relative and absolute yield spreads between these two securities? Further, what is the yield ratio? A Relative yield spread 30 2%; absolute yield spread 222 basis points; yield ratio 1 56
A. Relative yield spread 43.4%; absolute yield spread 222 basis points; yield ratio 1.43.
B. Relative yield spread 30.2%; absolute yield spread 222 basis points; yield ratio 1.56.
C. Relative yield spread 43.4%; absolute yield spread 66 basis points; yield ratio 1.43.
Answer: A
Explanation:
The difference between the yield on an on-the-run Treasury security and a non-Treasury issue of similar maturity is frequently referred to as simply the "yield spread." Further, since non-Treasury sectors of the fixed income market nearly always offer a spread to similar Treasury issues, non-Treasury sectors are referred to as "spread sectors" and securities in these sectors are referred to as "spread products."
There are many measures of yield spread; the most common measures include the absolute yield spread, the relative yield spread, and the yield ratio. Each of these methods is detailed below: {Absolute yield spread = [yield on security A - yield of on-the-run Treasury]} {Relative yield spread = [(yield on security A - yield of on-the-run Treasury) / yield of on-the-run Treasury} {Yield ratio = [Yield on security A / yield of on-the-run Treasury]}
Remember that while the most useful measures of relative yield spread (for purposes of risk analysis) is to measure a spread product against a comparable on-the-run Treasury issue, measures of yield spread can be calculated for any two debt securities, regardless of maturity, coupon, yield, or issuer. In this example, all of the necessary information has been provided, and the calculation of each measure of yield spread is as follows:
{Relative yield spread = [(0.0734 - 0.0512) / 0.0512]] = 0.43359}, or 43.4% {Absolute yield spread =
[0.0734 -0.0512] = 0.0222}, or 222 basis points {Yield ratio = [0.0734 / 0.0512] = 1.43359}, or 1.43

NEW QUESTION: 2

A. Option C
B. Option A
C. Option D
D. Option B
Answer: B

NEW QUESTION: 3


Answer:
Explanation:

NEW QUESTION: 4
Proxy firewall to check request from the user,the user checks the security policy through the firewall on behalf of external users to establish a connection to the real server,forwarding an external user request, and returns a response back to the real server to the external user.
A. True
B. False
Answer: A