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Scorpion4ik [409]
9 months ago
14

If the real risk-free rate is 112 basis points, the maturity risk premium is 177 basis points and the one-year inflation premium

is 263 basis points, what is the nominal risk-free rate
Business
2 answers:
Oksi-84 [34.3K]9 months ago
7 0

The nominal risk-free rate is 2.12%.

<h3>What is the nominal risk-free rate?</h3>
  • The nominal risk-free rate is typically the current yield on a three-month Treasury note, minus the impact of inflation.
  • The real risk-free rate is the return on a three-month Treasury bill less the effect of inflation.
  • The risk-free rate determines the return an investor can expect from an investment over a defined time period.
  • A risk-free rate is derived by deducting the current inflation rate from the total yield of the treasury bond that corresponds to the investment length.

To find the nominal risk-free rate:

Given -

  • Real risk-free Rate = 1.12%  
  • Inflation Rate = 2.63%
  • Nominal risk-free rate = (1+Real risk free Rate)
  • 1 + 1.12 = 2.12%

Therefore, the nominal risk-free rate is 2.12%.

Know more about nominal risk-free rates here:

brainly.com/question/24131282

#SPJ4

Vinil7 [7]9 months ago
5 0

Answer: 2.12%

Explanation:

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Answer:

Undifferentiated

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27. When a person buys stock in a company, that person is buying ________, but when a person buys a bond in a company, that pers
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lending

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At a price of $1.00, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.20, the coffee shop w
Julli [10]

Answer:

2.2

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midpoint method = {(Q2 - Q1) / [(Q2 + Q1) / 2]} / {(P2 - P1) / [(P2 + P1) / 2]}

midpoint method = {(150 - 100) / [(150 + 100) / 2]} / {(1.20 - 1) / [(1.20 + 1) / 2]}

midpoint method = [50 / (250 / 2)] / [0.20 / (2.20 / 2)] = (50 / 125) / (0.20 / 1.1)  

midpoint method = 0.4 / 0.19 = 2.2

The advantage of using the midpoint method to calculate price elasticity is that we can calculate the price elasticity between two points, and it doesn't matter if the price increases or decreases.

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2 years ago
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Better Publications sold annual subscriptions to their magazine for $42,000 in December, 2016. The magazine is published monthly
Amanda [17]

Explanation:

The adjusting entry is as follows

On January 31

Unearned revenue A/c Dr $3,500

     To Magazine subscription  revenue A/c $3,500

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The computation is shown below:

= Sale value of annual subscriptions ÷ total number of months in a year

= $42,000 ÷ 12 months

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3 years ago
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