Suppose 1-Year Treasury Bonds Yield 4

question 82

Multiple Choice

Suppose 1-year Treasury bonds yield 4.00% while 2-year T-bonds yield 5.10%.Assuming the pure expectations theory is correct,and thus the maturity risk premium for T-bonds is zero,what is the yield on a 1-year T-bond expected to be one year from now? Round the intermediate calculations to 4 decimal places and final answer to 2 decimal places.

• A) 6.21
• B) 7.39
• C) 7.27
• D) 5.47
• E) 6.09

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Definitions:

Job-Order Costing

Job-order costing is a costing method used to determine the cost of manufacturing each custom-made product or job, particularly effective for individual or special products.

Overapplied Overhead

A situation where the overhead allocated to products is more than the actual overhead incurred.

Job-Order Costing

A costing method that assigns manufacturing costs to each individual product or batch, ideal for custom or specialized goods.

Work In Process

Inventory that includes goods partially completed in the manufacturing process but not yet ready for sale.