<u>The equilibrium rate of return on a 1 year T-bond is 5%</u>
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<h3>Equilibrium rate</h3>
This is the interest rate at which the demand meet the supply at a particular point.
<h3>Equilibrium rate of return</h3>
This is the sum of dividend yield plus the rate of capital gains.
we can also say that the equilibrium rate for a 1 year T-bond in this case is the sum of the real risk free rate and the expected inflation.
Data
- Real risk free rate = 3%
- Expected inflation = 2%
Hence, the equilibrium rate of return will be 3% + 2% = 5%.
From the above, the equilibrium rate of return is 5%
Learn more on rate here
brainly.com/question/7040405
Actually they just said it is 4 years at the maxinmum
The problem states that only one variable can be used. Let L be the total number of liters of water and milk combined. 20% of the total is Milk. Therefore, Milk = L x 20/100 = 0.2 L The rest of it is Water. So Water = L - 0.2L = 0.8L The problem states the bottle has 1 liter of water. So 0.8L = 1 Answer to a) 0.8L = 1 is the equation where L is the total number of liters of water and milk combined. Milk = 0.2L and Water = 0.8L b) Solve for L in 0.8L = 1 L = 1/0.8 = 1.25 Milk = 0.2L = (0.2)(1.25) = 0.25 liters
