You are given the following data on different rates with the same maturity(1.5years) , but quoted on a different basis and different compounding frequencies :

• continuously compounded rate: 2.00% annualized rate
• continuously compounded return on maturity: 3.00%
• annually compounded rate: 2.10% annualized rate
• semi-annually compounded rate: 2.01% annualized rate

you want to find an arbitrage opportunity among these rates.
is there any one that seems to be mispriced?

Answers

Answer 1

Based on the periods of compounding, the rate that is mispriced is the annually compounded rate.

Why is this mispriced?

First find out the effective rates of all the rates.

Continuously compounded rate:

= e ^ (Annual rate x period of compounding) - 1

= e⁰.⁰² ˣ ¹.⁵ - 1

= 0.0305

= 3.05%

Continuously compounded return on maturity:

= e ^ (Yield x period of compounding) - 1

=  e⁰.⁰³ ˣ ¹ - 1

= 0.0305

= 3.05%

Annual compounding :

= ( 1 + (Rate of compounding / Number of compounding periods in year))^number of compounding periods - 1

= (1 + 2.10%)¹.⁵ - 1

= 0.0317

= 3.17%

Semi-annual compounding:

= ( 1 + (Rate of compounding / Number of compounding periods in year))^number of compounding periods - 1
= (1 + 2.01%/2)³ - 1

= 0.0305

= 3.05%

Mispricing occurs at Annually compounded rate.

Find out more on effective rate at https://brainly.com/question/6026546.


Related Questions

On january1, 1994, Joan sMITH BEGAN HER BUSINESS BY INVESTING 35,000 in cash in a checking account that

Answers

A checking account is important to keep the money for easy withdrawals through usually an Automated Teller Machine, or ATM

What is Accounting?

This refers to the record-keeping of financial records with the aim of keeping track of the finances of a business or corporation.

Please note that your question is incomplete so I gave you a general overview to help you get a better understanding of the concept.

Read more about accounting here:
https://brainly.com/question/26243955

______ is recommended for promotion when a high degree of service or support, known as ancillary services, is required after the sale of the product.

Answers

Answer:

hard work recommended for promotion

SWOT) and to identify 4 strengths, 4 weaknesses, 2 opportunity, and 2 threats. Then to write an analytical text for the case study. Then to write an analytical essay for the case study.
Nike’s Goddess Could a famously masculine company finally click with female customers? That was the challenge behind Nike Goddess, whose goal was to change how the company designed for, sold, and communicated with women. In its 30-year history, Nike had become the undisputed leader in sports marketing. But beneath the success was an Achilles’ heel. Nike is named after a woman – the Greek goddess of victory – but for most of its history, the company had been perceived as being mostly about men. Could Nike do more to realize the full potential of female customers? And how could it afford not to, given the threats to its future with Air Jordan running out of air and brands like Skechers digging into the teen market with shoes inspired by skateboarding, not basketball. That was the huge question at Nike HQ. The launch of Nike Goddess was the makings of an answer. Just Doing It Differently For much of its history, Nike’s destiny was controlled by its founders, Phil Knight and his running buddies, who signed up athletes in locker rooms and made the executive decisions. But by throwing together a diverse team of people with different backgrounds and different levels of seniority, Nike has found that it can keep many of its core attributes while adding new sources of inspiration. Take the combination of star designer John Hoke and newcomer Mindy Grossman, vice president of global apparel. Hoke designed the look and feel of the first Nike Goddess store. Then Grossman, whose career has included helping make Ralph Lauren into a retail icon, pitched1 the design ideas to Nike’s top retailers as stores within stores. Now it looks like Nike has a chance to reach a crucial objective: double its sales to women by the end of the decade. How to Sell to Women Nike Goddess began as a concept for a women-only store, and there’s a reason why. Many of the retail settings in which the company’s products were found were a turnoff to female customers: dark, loud, and harsh – in a word, male. In sharp contrast, the Nike Goddess stores have the comforting feel of a woman’s own home. How to Design for Women Designing a new approach to retail was only one element in Nike’s campaign. Another was redesigning the shoes and clothes themselves. Nike’s footwear designers worked on 18-month production cycles – which made it hard to stay in step with the new styles and colors for women. The apparel group, which worked around 12-month cycles, was better at keeping up with fashion trends. But that meant that the clothes weren’t coordinated with the shoes – a big turnoff 2 for women. How to Talk to Women When Jackie Thomas, Nike’s US brand marketing director for women, first heard the phrase ‘Nike goddess,’ she wasn’t impressed. ‘I don’t like talking to women through gender,’ she says. Nike Goddess had to mean something to women and it was her job to make that happen. ‘Women don’t need anybody’s permission. We are at our best when we are showing women a place where they didn’t think they could be.’ For John Hoke, the real power of Nike Goddess is not about traffic at stores. It’s about changing minds inside the company. ‘I knew that Goddess could galvanise3 us,’ he says, ‘It was an opportunity to redefine and re-energies our entire brand around a market that was taking off.’​

Answers

The strengths of the productThe company has a strong brand awareness. They are a very recognizable brand biven their symbol and its uniqueness in the footwear market.They have a large customer base. They have loyal customers globally. This has helped to grow their market cap.They are committed to healthy environmental practices. The CEO is committed to finding solutions to environmental issues.They have established great relationships with icons that have helped to grow the brand. An example is Michael Jordan.

The weaknesses They have poor employee conditions in foreign nations. These are inclusive of low wages and unsafe labor practices.The business retailers are sensitive to prices. The retailers are the strongest consumers.The business have pending debts. This is a financial threat on the business.The business is largely dependent on the US market. Most of their sales is from the US.

Two opportunities in the marketThey have emerging markets. The product still has the opportunuities of having its presence in more countries.They have an innovative market. The business is within the spheres of technology and fitness and health.

The threats to the productFake products in the market. The fake products that bear same or close name with the product are capable of affecting the revenus that the business has to generate.competition. The existence of similar brands in the market has made the company spend more on ads and marketing.

Read more on SWOT analysis here: https://brainly.com/question/25066799

What is a main disadvantage of leasing a vehicle compared to buying a vehicle? the up-front cost the monthly payments the length of payments the cost of insurance and gas

Answers

An upfront cost is the amount of money owed at the start of a transaction or business engagement.

Why Is Understanding Upfront Costs Important?

A prospective homeowner can confidently choose a piece of property that is appropriate for their financial condition by thoroughly comprehending upfront fees as well as ongoing costs such as monthly mortgage payments and property taxes.

Because house ownership expenses exceed the reported purchase price, a good real estate agent will walk their client through the various amounts they will owe to ensure that the buyer is not caught off guard by significant upfront costs.

Thus When comparing up-front costs, buying is more advantageous than leasing which is more costly.

For more information about upfront costs refer to the link:

https://brainly.com/question/2761249

Mary remodeled her bathroom, and her assessment went from $67,000 to $71,000. If she pays taxes at a rate of 31.5 mills, what is her increase in property tax?

Answers

Answer:

$126

Explanation:

To solve, find the amount of property tax at $67,000, then find the amount of property tax at $71,000 and subtract the amounts.

Mary remodeled her bathroom, and her assessment went from $67,000 to $71,000. If she pays taxes at a rate of 31.5 mills, Then her increase in property tax will be $126.

What is tax?

The taxes are mandatory contributions, that are levied on individuals or corporations by a government entity—whether local, regional, or national.

The tax revenues are basically used for financing government activities, including public works and services such as construction of roads, hospitals and schools, or programs such as Social Security, old age pension and Medicare.

In economics, taxes fall on whoever pays the burden of the tax, whether this is the entity being taxed, such as a business, or the end consumers of the business’s goods.

Mary remodeled her bathroom, and her assessment went from $67,000 to $71,000. If she pays taxes at a rate of 31.5 mills, Then her increase in property tax will be $126.

Learn more about tax here:

https://brainly.com/question/16423331

#SPJ6

Budgets ______. Multiple choice question. Focus on what has happened in the past communicate management's plan throughout the organization primarily help managers with day-to-day emergencies

Answers

Budgets assist to communicate management's plan throughout the organization.

What is budget?

A budget is a spending plan based on income and expenses. It is an estimate of how much money you'll make and spend over a certain period of time.

The purpose of the budget is to establish financial objectives with the monitoring and measurement of results, enabling better decision-making.  Budget is done for allocation of expenditures for various purposes over the next year.

Hence, budgets communicate management's plan throughout the organization.

Learn more about budget here : https://brainly.com/question/6663636

1.24. If an investor borrows $100 and pays back $100 after a year to settle his loan, it implies that the rate of interest is ________. A) 0 percent B) 1 percent C) 10 percent D) 100 percent

Answers

,If an investor borrows $100 and pays back $100 after a year to settle his loan, it implies that the rate of interest is 0%

What is Interest Rate?

This refers to the added amount which is to be repaid with respect to a loan after a given time period.

With this in mind, we can see that because after a period of 1 year, the principal amount which is $100 is paid back without any additional charge, then the rate of interest on the loan is 0%.

Read more about interest rate here:
https://brainly.com/question/25793394

From the perspective of a power holder, _____ strategy of negotiation implies that the power holder jointly develops and shares power with the other.

Answers

Answer:

Negotiation

Explanation:

Negotiation is a dialogue between two or more people

what independent sales branch is being replaced by a manufacturer sales branch

Answers

the independent one is the one left alone

When you receive a loan, the money the lender gives you is called the ____________. a. interest b. line of credit c. principal d. collateral

Answers

Answer:

c : principal

Explanation:

What do you need to provide in order to get secured credit?

An asset.

When the loan is received by the person and the money which lenders give to the person is the principle. The principle is the money that needs to give back after a certain period.

What is a loan?

A loan is a quantity of the money borrowed from a bank or other financial institution. One or more persons or businesses to finance scheduled or unanticipated occurrences. The borrower thereby incurs a debt, which he must repay with interest and within a specified time frame.

Thus, option C is correct.

For further details about principles and loan refer to this link:

https://brainly.com/question/469931

If you wanted to open a restaurant, which space would likely
charge the most for rent?
O A famous Las Vegas casino
O A small neighborhood diner
O A medium space in a strip mall
A large warehouse in a rural area

Answers

A famous Las Vegas casino because it gets teh most revenue.

What are cultural, control, and organizational variables that are utilized by decision makers to effect change in their organization known as?.

Answers

Answer:

managerial levers

Explanation:

Saraiya runs a small café. She would like to start placing small ad buys on social media and hires an analytics firm to determine which platforms she should advertise on. What type of cost would this be considered?.

Answers

A social media implementation cost wil be incurred if she start placing small ad buys on social media and hires an analytics firm.

What is a social media implementation cost?

These is a varible cost that is used for implementation of social media account for advertisement, promotion etc.

Hence, these implementation cost wil be incurred if she start placing small ad buys on social media and hires an analytics firm.

Read more about implementation cost

brainly.com/question/26885818

How does self-motivation fit into the career readiness model?.

Answers

A self-motivation was ablt to fit into the career readiness model because it is an attitude.

What is a self-motivation?

It refers to the personal ability to motivate and drive oneself to take initiative and action to pursue set goals and complete tasks.

Therefore, the self-motivation was ablt to fit into the career readiness model because it is an attitude that is innate in an individual.

Read more about self motivation

brainly.com/question/11871721

Based on your reading of the following passage, to which listed careers do you think John might be suited? (Select all that apply. ) John is a high school graduate. He is smart and ambitious but does not wish to pursue a college degree. John has good technical skills, can operate computers, and has a strong grasp of basic physical sciences. He served in the navy for four years. John is not opposed to joining a union. He does not have a spouse or any children. John is physically healthy, strong, and has good vision without any significant issues. John might be suited to be: a seaman a seaman a rail yard worker a rail yard worker a ship's captain a ship's captain a dispatcher

Answers

Answer:

a seaman

a seaman

a rail yard worker

Explanation:

When parents or eligible students request inspection and review of education records, federal law stipulates that the requested information must be provided within:.

Answers

The period of time that is requested for inspection and review of education records, according to federal law is 45 days.

What is an education records review?

This is a review of the academic standing of a student. The reason why the review is needed is probably because the student wants to apply for a new school.

According to federal law, when the request is received, the records must be provided within 45 days.

Read more on education records here: https://brainly.com/question/24911873

Help me please.. there is no option on here for human resources principals, so i jus clicked business as the subject..

Answers

Answer:

pls explain the question first

Schaad Corporation has entered into an eight-year lease for a piece of equipment. The annual payment under the lease will be $2,500, with payments being made at the beginning of each year. If the discount rate is 14%, what’s the present value of the lease payments? Ignore income taxes in this problem

Answers

Based on the payments being made at the beginning of the year and the discount rate, the present value of the lease payments is $13,220.75.

What is the present value of the lease payments?

The fact that the payments are made at the beginning of the year makes this an annuity due.

The present value is:

= Amount x ( Present value of annuity due factor, 14%, 8 years)

Solving gives:

= 2,500 x 5.2883

= $13,220.75

Find out more on present values of annuities at https://brainly.com/question/10517104.

If making your family and friends a priority is important to you, you value
O responsibility
O compassion
O relationships
O none of the above

Answers

Answer:

Relationships.

Explanation:

We maintain ourselves worth by trying to please excel meditate and even control or change ourselves to be closer to the people we love most.

Describe your strategy for pricing your goods or service. What will the final price be?:​

Answers

Answer:

Think of the price of materials then of your time

Explanation:

Which of the following factors are considered when calculating gdp? i. goods produced within a country by citizens of that country ii. goods produced within a country by residents who are not citizens iii. goods produced within a country for use in production of other goods iv. goods produced by a country’s citizens outside of its borders a. ii and iii b. i only c. i and ii d. i, ii, iii, and iv

Answers

Gross domestic product (GDP) is the total amount or market worth of all finished products and services produced within the borders of a country in a given time period.

How is GDP calculated?

GDP is often estimated on an annual basis, but it is also measured quarterly. The government of the United States, for example, produces an annualized GDP assessment for each fiscal quarter as well as for the entire calendar year.

The various data sets included in this study are presented in real terms, which means that the data has been adjusted for price changes and is thus net of inflation.

Thus, Option D is correct about the factors of GDP.

For more information about GDP refer to the link:

https://brainly.com/question/4131508

Many developed countries have deindustrialized and are transitioning to a postindustrial economy. A. Identify and describe the economic sector that becomes dominant when a country deindustrializes and restructures from an industrial to a postindustrial economy. B. Describe TWO ways countries transitioning to a postindustrial economy utilize the international division of labor. C. Describe ONE way in which the roles of women in the paid labor force of developed countries change as a result of the transition to a postindustrial economy. D. Describe TWO ways in which brownfields can be redeveloped in postindustrial cities.

Answers

In the post industrial economy,

A. the economic sector that is dominant when the country deindustrializes is the Tertiary industry:

quaternary and quinaryservice job

Some of the jobs here require the tertiary form of education.

b. Two ways that countries transition to postindustrial economy are:

They make use of countries that have little government regulations and minimal taxes. They use countries where trade unions are non existent.

c. A way that the roles of women get to change is through the reduction in the pay gap that exists between genders. Pay can also be raised for females.

d. Brownfields can be redeveloped in the following ways in the post industrial cities:

Recreational means: sports and entertainments.Agriculture: Creation of urban farms and gardens.

What is a post industrial economy?

This is an economy that is said to have advanced from the manufacturing era into an era of production of services.

Read more on post industrial economy here: https://brainly.com/question/17965471

If the government levies a $500 tax per car on sellers of cars, then the price received by sellers of cars would:.

Answers

The answer is decreased by less than $500

WHY:
If he leaves $500 tax per car the price will be decreased less than $500

Why is the monopolist is a price maker?

Answers

Answer:

✒️Answer:

A monopoly firm is a price-maker simply because the absence of competition from other firms frees the monopoly firm from having to adjust the prices it charges downward in response to the competition. ... Absent that competitive atmosphere, a sole provider can set the price he or she wants.

Explanation:

#CarryOnLearning

[tex]watch.some.anime[/tex]

When a manager creates a budget that is too easy to attain, ______ occurs.

Answers

Answer:

Explanation:

budgetary slack

Jasper has been working a lot of overtime during the most current economic expansion. As a result, his income is high enough for him to move from the 12 percent tax bracket to the 22 percent tax bracket. The increased amount Jasper pays to the government is an example of:

Answers

The increased taxes paid to the government by Johnny represent what are known as automatic stabilizers slowing the economy.

What are automatic stabilizers?

These are factors in the economy that stop it from growing too fast that it becomes overheated.

Taxes are one such stabilizer because in making sure that people pay more to the government when they earn more, their spending is reduced which means that the economy doesn't grow too much.

Find out more on economic stabilizers at https://brainly.com/question/1346450.

12. Currency is useful in that it serves as

A. a hedge against inflation.
B. a convenient way to save money.
C. a medium of exchange.
D. all of the above.

Answers

I think the answer is C- a medium of exchange

A company issues $100,000 of 5%, 10-year bonds dated january 1. The bonds pay interest semiannually on june 30 and december 31 each year. If the bonds are sold at par value, the issuer records the sale with a debit to:.

Answers

Assuming  the bonds are sold at par value, the issuer will records the sale with a debit to: Cash $100,000.

Journal entry

Based on the information given if the company issues the amount of  $100,000 of 5%, 10-year bonds dated january 1 the appropriate journal entry to record this transaction is:

Debit Cash $100,000

Credit Bond payable $100,000

(To record bonds sold at par value)

Inconclusion the issuer will records the sale with a debit to: Cash $100,000.

Learn more about journal entry here:https://brainly.com/question/14279491

What is the purpose of a w-4 form, and when do you receive it?.

Answers

Answer: to let your employer know how much money to withhold from your paycheck for federal taxes.

Explanation: Your employer should provide a W-4 form when you are hired.

What is a very common way to purchase an automobile?

Answers

Answer:

through a car dealership?? what kinda question is that

Other Questions
Solve for the missing angle What environmental issues gave people reason to speak out and demand change in 1970?. what is some major challenge facing the accounting profession ? When Thomas Edison first sold electricity, he used zinc coulometers to measure charge consumption. (In a coulometer the cathode is weighed before a current is passed through it, and then again after the passage of current. The weight increase is proportional to the amount of current that flows through the cathode.) If the zinc plate in one of Edison's coulometers increased in mass by 7.85 g, how much charge had passed through it Are there more pressing issues that we should be focusing on?(i.e. inflation and gas prices?) Given mn, find the value of x.(6x-7)m(4x-10 Yesterday, Salma had 387 baseball cards. Today, she gave 141 away. How many cards does Salma have left? Can ya'll help please?simplify:-(-3) (exponent-2) (5) (exponent-2) (7) (exponent-3) ---------------------------------------------------------------------------- 15 (exponent-2)A) -343b) -127c) -75d) 126 Three times a number x is more than 18. An alligator lying in muddy water.Pick the sentence that uses both vivid verbs and specific nouns to describe the scene.We saw it basking in the sun.The alligator blended into the swamp.The alligator was by the water.The animal was by the water on a sunny day. Triangle ABC was dilated and translated to form similar triangle A'B'C'. On a coordinate plane, 2 triangles are shown. Triangle A B C has points (0, 2), (2, 2), and (2, 0). Triangle A prime B prime C prime has points (negative 4, negative 1), (1, negative 1), and (1, negative 6).What is the scale factor of the dilation?One-fifthTwo-fifthsFive-halves5 answer poem review1. How does this poem make you feel?2. My Favourite line in the poem is3. I like this line BECAUSE What do the underlined words and words suggest about LIDAR technology? A square has a perimeter of 36 cm. What is the length of each side? PLEASE HELP ME WITH THIS!!!!! The ancient held sporting events inside this circular arena called the A'B'C' was constructed using ABC and line segment EH.2 triangles are shown. Line E H is the line of reflection. Line segment B B prime has a midpoint at point D. Line segment A A prime has a midpoint at point F. Line segment C C prime has a midpoint at point G.For to be the line of reflection between and , which statements must be true? Select three options.BD = DB'DF = FGmEFA = 90The line of reflection, EH, is the perpendicular bisector of BB', AA', and CC'.ABC is not congruent to A'B'C'. I NEED HELP ASAP!!!!Which sentence best contrasts limited and unlimited governments? A. Laws restrict limited governments, but not unlimited governments. B. Constitutions define unlimited governments, but not limited governments. C. Citizens vote in unlimited governments, but not in limited governments. D. Governments make laws in limited governments, but not in unlimited governments. Find the slope and y-intercept for the graph of the equation6x - 4y = -36 The total cost of producing Q units of a given product is given by TC = 500+ 4Q2-12Q Compute Marginal cost and average cost