1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
lorasvet [3.4K]
3 years ago
10

Suppose that a 5-year Treasury bond pays an annual rate of return of 2.9%, and a 5-year bond of the fictional company Risky Inve

stment Inc. pays an annual rate of return of 7.3%. The risk premium on the Risky Investment bond is ___ percentage points.
Business
2 answers:
Minchanka [31]3 years ago
5 0

Answer: The risk premium on the risky investment bond is 4.4%

Explanation: Risk premium is the rate of return by which a risky asset must exceed a risk free asset. The aim of this is to induce an individual to hold the risky asset rather than the risk-free asset.

Risk premium (Rm) is calculated by subtracting the risk free rate (Rf) from the risky investment rate (Ri).

That is Rm= Ri - Rf

= 7.6% - 2.9%

=4.4%

solniwko [45]3 years ago
3 0

Answer:

The risk premium is 4.4%

Explanation:

The risk premium on any given investment is the difference between the risky investment and the risk free investment and in this case we know treasury bonds are risk free and offer a certain return of coupons because they come from governments rather than the fictional ones like the one from risky investment inc so to find the risk premium we say :

Risk Premium = Risky investment rate - Risk free investment Rate

                       = 7.3% - 2.9%

                      = 4.4%

You might be interested in
Ivanhoe Company purchased a new machine on October 1, 2017, at a cost of $77,980. The company estimated that the machine has a s
ad-work [718]

Answer:

Annual depreciation= $10,160 a year

Explanation:

Giving the following information:

Ivanhoe Company purchased a new machine on October 1, 2017, for $77,980. The company estimated that the machine has a salvage value of $6,860. The machine is expected to be used for 72,900 working hours during its 7-year life.

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (77,980 - 6,860)/7= $10,160 a year

6 0
3 years ago
If US workers can produce everything in less time than Mexican workers, it is not possible for the US to gain from trade with Me
Brums [2.3K]

Answer:

False

Explanation:

False because the theory of comparative advantage applies

5 0
4 years ago
Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen. one can conclude
Scorpion4ik [409]
It can be concluded that the supply of swimming pool maintenance services has decreased. We can not say that <span>the demand for swimming pool maintenance services has increased.It is not accurate to say things like  the technology has advanced the swimming pool services. By means of the situation gievn, we can say that the maintenance services have decreased. </span>
6 0
4 years ago
Internet access to use online banking costs you $39.99 per month. A book of checks costs you $17.95 per 100. Your bank charges y
algol [13]

Answer:

$21.9275

Explanation:

The cost of online banking is $39.99

The cost of checks books is $17.95 per 100. The cost associated with 25 checks

= $17.25/100 x 25

=0.1725 x 25

=$4.3125

The cost of a stamp is 50 cents, which is $0.50

for 25 checks

=$0.50 x 25

=$12.5

The writing fee

=$0.05 x 25

=$1.25

Total cost of using checks

= $4.3125 + $12.5 +$1.25

=$18.0625

the difference between online banking and checks

= $39.99 - $18.0625

=$21.9275

6 0
3 years ago
Employee empowerment is another term used to describe ________, an objective of the employment relationship in which workers are
lisabon 2012 [21]

Employee empowerment is another term used to describe decentralization an objective of the employment relationship in which workers are given some say in the conditions of their employment.

Centralization or decentralization is the process by which an organization's activities, especially those related to planning and decision-making, are decentralized or delegated from a central, authoritative place or group.

The concept of decentralization has been applied to the group dynamics and management sciences of private companies and organizations, political science, law and administration, economics, money, and technology.

learn more about decentralization  here; brainly.com/question/27661901

#SPJ4

3 0
1 year ago
Other questions:
  • Comet Company is owned equally by Pat and his sister Pam, each of whom hold 100 shares in the company. Comet redeems 50 of Pam's
    5·1 answer
  • Based on the data provided, which statement about the total cost for one year is true?
    7·2 answers
  • Gabrielle is due to give birth to a boy in march. before she became pregnant, gabrielle weighed 140 pounds, which was in the hea
    12·2 answers
  • On December 31, the company provides consulting services and bills its customer $3,000 for these services.
    8·1 answer
  • A flexible budget variance is $1,500 favorable for unit-related costs. This indicates that: A. actual costs were $1,500 more tha
    9·1 answer
  • When a magazine company collects cash for selling a subscription, it is an example of: Multiple Choice An accrued liability tran
    10·2 answers
  • if the market price of common stock increases substantially, bondholders with convertible bonds benefit. convertible bonds can b
    15·1 answer
  • Write five advantages of multinational company​
    14·1 answer
  • What is the relationship between interest rates and aggregate spending?
    11·1 answer
  • Bloomfield Bakers accounts for its investment in Clor Confectionary under the equity method. Bloomfield carried the Clor investm
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!