Home » Assignment #1: Return on Financial Assets Answer the following: Consider the following four debt securities, which are identical in every…

Assignment #1: Return on Financial Assets Answer the following: Consider the following four debt securities, which are identical in every…

Assignment #1: Return on Financial AssetsAnswer the following:Consider the following four debt securities, which are identical in every characteristic except as noted:W: A corporate bond rated AAAX: A corporate bond rate BBBY: A corporate bond rated AAA with a shorter time to maturity than bonds W and XA corporate bond rated AAA with the same time to maturity as bond Y that trades in a more liquid market than bonds W, X, or Y.List the bonds in the most likely order of the interest rates (yields to maturity) of the bonds from highest to lowest. Explain your work.Explain how an economist could use the slope of the yield curve to analyze the probability that a recession will occur and why the spread may matter.One year ago, you bought a bond for $10,000. You received interest of $400 at the end of the year, as well as your $10,000 principal. If the inflation rate over the last year was five percent, calculate the real return. Show your work.Suppose that the price of a stock is $50 at the beginning of a year and $53 at the end of the year, and it pays a dividend of $2 during the year. Calculate the stock’s current yield, capital-gains yield, and the return. Show your work for three separate calculations.Use the capital-asset pricing model to predict the returns next year of the following stocks, if you expect the return to holding stocks to be 12 percent on average, and the interest rate on three-month T-bills will be two percent. Calculate a stock with a beta of -0.3, 0.7, and 1.6. Show your work for three separate calculations. The format of the report is to be as follows:Typed, double spaced, Times New Roman font (size 12), one inch margins on all sides, APA format.Type the question followed by your answer to the question.In addition to the 3-4 pages required, a title page is to be included. The title page is to contain the title of the assignment, your name, the instructor’s name, the course title, and the date.

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