What is liquidity risk in the context of investing in bonds?

What describes the role of secondary markets?

Red Tiger Trading has reported annual net income of $335,000 and has 115,000 shares outstanding. The company distributes 60% of its earnings as dividends. Its stock is currently trading at $73 per share. What is the company’s dividend yield? Enter your answer in the correct unit and rounded to two decimal places.

BiggCity Bank has an outstanding bond with 12 years remaining until maturity and a face value of $1,000. The bond pays a 4.4% annual coupon, with interest paid semi-annually. If the current market yield is 7.0% annually (compounded semiannually), what is the bond’s current market price?Enter your answer with two decimal places.

Monsters Inc. has an outstanding bond with a face value of $1,000 and 5 years remaining until maturity. The bond pays a 7.0% annual coupon, with semi-annual payments. The current market yield is 6.0% per year. What should be the current market price of the bond? Enter your answer as a positive number rounded to two decimal places.

Tom purchased 40 shares of WolfPack Inc. for $92 per share 50 days ago. During the holding period, the company paid a dividend of $0.60 per share. Today, Tom sold the shares for $93 each. What is Tom’s holding period return (HPR)?Hint: Enter your answer with two decimal places. For example, enter 12.34 for 12.34%

What happens in the primary market?

In April 2025, the inflation rate in Germany was 2.2% per year. The average nominal interest rate on mortgages was 4.7%. What was the average real mortgage rate in Germany? Use the full Fisher equation (not the short version) and enter your answer with two decimals.

The BlazeBerry Spark credit card charges an annual interest rate (APR) of 23%, with interest compounded daily. What is the effective annual rate (EAR) on this card? Hint: Assume 365 days in a year. Enter your answer rounded to two decimal places.

Monsters Inc. is planning a major campus expansion to meet growing demand and intends to finance it by issuing 1,000-year bonds. Based on market research and advice from their bankers, they have identified the following risk premiums: Default risk premium: 2.25% Maturity premium: 3.5% Liquidity premium: 1.29% Nominal risk-free rate (base rate): 5.1% What interest rate (yield) should Monsters Inc. offer on these bonds to attract investors and raise the necessary capital? Enter your answer with two decimals.