Question

An investor would prefer a PEG that is greater than 5 that is greater than 4...

An investor would prefer a PEG

that is greater than 5

that is greater than 4

that is less than 2

that is less than 1

Inflation is currently 3%. It is expected to rise sharply over the next 5 years. What should an investor do?

move assets from equity into bonds

move assets from real estate into equity

move assets from bonds into real estate

move assets from high-yield bonds into corporate bonds
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The correct choice is : - That is less than 2

Explanation : -  A PEG of 1.0 to 2.0 may suggest the stock is reasonably valued, and a ratio greater than 2.0 may suggest the stock is overvalued.

_____________________________________________________

The correct choice is : - Move assets from bonds into real estate

Explanation : - Real estate provide a hedge against inflation. In an environment where inflationis rising, the value of real estate and real estate securities can be expected to increase as well. In times of high and rising inflation, investors have historically been rewarded by changing their asset allocation strategy to increase their investment in the real estate asset class. In contrast, treasury securities and fixed-income securities such as bonds have performed poorly during periods of high and rising inflation .

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose that investors prefer one-year bonds to three-year bonds and will purchase a three-year bond only...
Suppose that investors prefer one-year bonds to three-year bonds and will purchase a three-year bond only if they expect to receive an additional 2% over the return from holding one-year bonds. Currently, one-year bonds yield 3%, but investors expect this yield to rise to 4% next year and to 6% the year after. Which of the three models of term structure is relevant in this case? What is the yield on the 3-year bond? Graph the yield curve. Clearly label...
5) Borrowers benefit and lenders lose when the A) actual interest rate is less than the...
5) Borrowers benefit and lenders lose when the A) actual interest rate is less than the expected real interest rate. B) actual interest rate is greater than the expected real interest rate. C) actual interest rate is equal to the expected real interest rate. D) actual inflation rate is less than the expected inflation rate. is it (a) by chance
(1) Assume the expected inflation rates for the next five years are as follows: Year                          Inflation...
(1) Assume the expected inflation rates for the next five years are as follows: Year                          Inflation Rate     1                                       8.0%     2                                       6.0     3                                       4.0     4                                       3.0     5                                       5.0 In Year 6 and thereafter, inflation is expected to be 3 percent. The maturity risk premium (MRP) is 0.1 percent per year to maturity for bonds with maturities greater than six months, with a maximum MRP equal to 2 percent. The real risk-free rate of return is currently...
1. The real risk-free rate is 2.6%. Inflation is expected to be 2.15% this year, 4.15%...
1. The real risk-free rate is 2.6%. Inflation is expected to be 2.15% this year, 4.15% next year, and 2.65% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round your intermediate calculations. Round your answer to two decimal places. 2. A company's 5-year bonds are yielding 9.75% per year. Treasury bonds with the same maturity...
1. T or F: For holders of bonds, investment horizon is always equal to time to...
1. T or F: For holders of bonds, investment horizon is always equal to time to maturity 2. T or F: the modified duration of a zero-coupon bond is equal to its time to maturity 3. T or F: the purpose of duration immunizing is to maximize expected return. 4. T or F: Perpetuity bonds have a duration of infinity 5. T or F: Duration increases with a rise in yield 6. T or F: Prices rise more with a...
1. T or F: For holders of bonds, investment horizon is always equal to time to...
1. T or F: For holders of bonds, investment horizon is always equal to time to maturity 2. T or F: the modified duration of a zero-coupon bond is equal to its time to maturity 3. T or F: the purpose of duration immunizing is to maximize expected return. 4. T or F: Perpetuity bonds have a duration of infinity 5. T or F: Duration increases with a rise in yield 6. T or F: Prices rise more with a...
1.) The cost of raising capital through retained earnings is __________ (greater than, less than) the...
1.) The cost of raising capital through retained earnings is __________ (greater than, less than) the cost of raising capital through issuing new common stock. 2.) The current risk-free rate of return is 3.80% and the current market risk premium is 6.10%. Blue Hamster Manufacturing Inc. has a beta of 1.56. Using the Capital Asset Pricing Model (CAPM) approach, Blue Hamster’s cost of equity is __________ (13.99%, 17,32%, 14.65%, 13.32%) 3.) Fuzzy Button Clothing Company is closely held and, as...
A real estate investor has the opportunity to purchase land currently zoned residential. If the county...
A real estate investor has the opportunity to purchase land currently zoned residential. If the county board approves a request to rezone the property as commercial within the next year, the investor will be able to lease the land to a large discount firm that wants to open a new store on the property. However, if the zoning change is not approved, the investor will have to sell the property at a loss. Profits (in thousands of dollars) are shown...
Suppose the inflation rate is expected to be 6% next year, 5% the following year, and 3% thereafter.
Suppose the inflation rate is expected to be 6% next year, 5% the following year, and 3% thereafter. Assume that the real risk-free rate, r*, will remain at 2% and that maturity risk premiums on Treasury securities rise from zero on very short-term bonds (those that mature in a few days) to 0.2% for 1-year securities. Furthermore, maturity risk premiums increase 0.2% for each year to maturity, up to a limit of 1.0% on 5-year or longer-term T-bonds.Select the correct...
Q1 - The number of adults (people greater than or equal to 15 years of age)...
Q1 - The number of adults (people greater than or equal to 15 years of age) that are considered officially unemployed (by government-calculated statistics) is typically different from (and usually less than) the number of adults actually without a job. This situation may arise because: i) The labor force (as calculated by government statistics) is inclusive only of adults who are either employed or actively seeking employment. ii) Full-time students, homemakers, and retirees are not considered part of the labor...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT