Derive the probability distribution of the 1 year HPR on a 30 year US Treasury Bond with a coupon of 4.00% It has a par value of $100.00 The probability distribution of its YTM a year form now is given below. Th entire 4% coupon is paid at the end of the year rather than every 6 months. Economy Probability YTM Price Bppm 10.00% 6.00% $72.82 Normal 60.00% 5.00% $84.86 Recession 30.00% 4.00% $100.00 100.00% What is the capital gain, if any, for each state of the economy, where it is calculated as the difference between the market value and par value? a. -$17.18, -$14.14, $0.00 b. $27.18, $15.14, $0.00 c. -$21.78, -$11.54, $0.00 d. -$27.18, -$15.14, $0.00

The former chairman of the federal reserve, alan greenspan, used the term "irrational exuberance" in 1996 to describe the high levels of optimism among stock market investors at the time. stock market indexes such as the s& p composite price index were at an all-time high. some commentators believed that the fed should intervene to slow the expansion of the economy. why would central banks want to clamp down when the economy is growing? a. to block the formation of unsustainable speculative asset bubbles. b. to curtail excessive profits in the banking system. c. to prevent inflationary forces from gathering momentum. d. all of the above. e. a and c only.