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Bas_tet [7]
10 months ago
9

suppose the real rate is 3.4 percent and the inflation rate is 5 percent. what rate would you expect to see on a treasury bill?

(do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Ghella [55]10 months ago
7 0

the rate expected on the treasury bill is 8.57%. enter answer as a percent rounded to 2 decimal places.

The real rate is 2.1 percent

The inflation rate is 3.4 percent

To find the rate which is to be expected on a treasury bill we have to apply fisher's equation

1+R= (1+r)(1+h)

Therefore, the rate on the treasury bill can be calculated as follows

1+R= (1+r)(1+h)

r= 3.4%

= 3.4/100

= 0.034

h= 5%

= 5/100

= 0.05

R= (1+r)(1+h)-1

= (1+0.034)(1+0.05)-1

= (1.034×1.05)-1

= 1.0857-1

= 0.0857×100

= 8.57%

A Treasury invoice (T-invoice) is a brief-term debt obligation backed via the U.S. Treasury Department with an adulthood of one year or less. Treasury bills are generally bought in denominations of $1,000 even as a few can attain a denomination of $five million.

let's say an investor purchases a par price of $1,000 T-bill with an aggressive bid of $950. whilst the T-invoice matures, the investor is paid $1,000, thereby income $50 in interest on the funding.

U.S. Treasury bills are auctioned on a regular schedule. individuals should purchase T-payments from the government using the TreasuryDirect internet site. it is free to register, and it'll function like a brokerage account that holds your bonds. in addition to bidding on new troubles, You also can install reinvestments into securities of an equal type and time period. as instance, you can use the proceeds from a maturing fifty-two-week invoice to shopping for some other fifty-two-week invoice. sure brokerage corporations can also permit buying and selling in U.S. Treasuries.

To learn more about treasury bills visit here:

brainly.com/question/17204626

#SPJ4

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5 0
2 years ago
Assume that one year ago, you bought 130 shares of a mutual fund for $27 per share, you received an income distribution of $0.12
Anika [276]

Answer:

Solution:

Dollar amount of total return = Capital gain distributions + Change in market value

First, we calculate the capital gain distributions

Income and capital gains distribution = ($0.12 + $0.22) x 130 shares

Income and capital gains distribution = $44.2

Now, we calculate the change in market value

Change in market value = Sales Price - Purchase price

Change in market value = 130 x $24 - 130 x $27

Change in market value = -$390

Therefore,

Dollar amount of total return = $44.2 + (-$390)

Dollar amount of total return = -$345.80

6 0
3 years ago
Mallory Furniture buys two products for resale: big shelves (B) and medium shelves (M). Each big shelf costs $500 and requires 1
Ghella [55]

Answer:

The answer is D

Explanation:

Solution:

Recall that:

Malloy Furniture purchases two products: Big shelves B and Medium shelves M

The cost of big shelf is =$500

The space required = 100 cubic feet

The cost of each medium shelf is =$300

Storage space = 90 cubic feet,

Now,

Since the values 100 and  90 is greater than 18000 cubic feet available for storage, what is required would be 100 big shelves and 100 medium shelves

5 0
3 years ago
Emma, the marketing manager, is constantly seeking information about her competition while looking online or speaking to people.
MariettaO [177]

Answer:

The correct answer would be, Monitor.

Explanation:

Emma, the marketing manager, is constantly seeking information about her competition while looking online or speaking to people. Emma is playing the role of a Monitor.

Monitor's role is to reassure the professionals or institutions about the stability of the company. Monitor sets a close look at the competitors and the possible competition he can encounter, while working on making networks. Monitors make networks by talking to people and have a look at every possible beneficial detail. So the Marketing managers usually act as the monitors. This is because they can have all the information which is required to formulate the powerful marketing strategy for the company.

8 0
2 years ago
Describe at least three exchange rate factors that are likely to attract foreign investors to a country's currency. Explain why
lana66690 [7]

Answer: 1. High Interest

2. Low Government Debt

3. Political Stability

Explanation:

Foreign Investors are Investors and investors always like to invest where there are prospects of growth and profit.

High Interest Rates give them the opportunity to invest their money in a currency that will give them a great return because a country where there are high interest rates imparts this on its currency which causes it to rise in value thereby giving currency holders a capital gain.

Another factor is Government Debt. A country with high Government debt will typically be unable to raise funds through the bond market easily. This shortage of funds can lead to inflation which devalues currency causing foreign currency investors to flee.

Finally there is the Political Factor (other factors exist). A stable country politically stands a better chance of maintaining a higher value currency that one with lower political stability. This is because political Stability attracts investors and as more investments come into a country, this reflects in its currency by making it stronger which will attract foreign currency investors.

6 0
3 years ago
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