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ICE Princess25 [194]
3 years ago
7

5-year Treasury bonds yield 5.5%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4

%. What is the real risk-free rate, r*? 3.87% 3.52% 3.20% 2.88% 2.59%
Business
1 answer:
tangare [24]3 years ago
7 0

Answer:

option 3.20%

Explanation:

0.055-0.019-0.004 =0.032 = 3.20%

The inflation premium is added to the real risk-free rate as well to the maturity risk premium

A no risk rate would be 3.2

because there is a certain change for inflation a premium is added, also another premium is added to prevent investor to purchase the bond on a lower price.

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The financial model that measures the current value of all cash inflows and outflows using management's minimum desired rate of
Anna [14]

Answer:

Net present Value (NPV)

Explanation:

The net present value (NPV) is one of the tools used in business for appraising the desirability or otherwise of projects or investments. It compares the present value (PV) of cash inflows with the present value of cash outflows over a period of time. It is the difference between the present value of the future cash inflows from an investment and the amount of initial capital outlay that gives either profit or loss.

7 0
3 years ago
Last month you assumed the position of manager for a large car dealership. The distinguishing feature of this dealership is its
ELEN [110]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

8 0
3 years ago
Suppose the number of people employed (E) is currently 100 and the number unemployed (U) is 10 and the labor force is fixed at 1
artcher [175]

Answer:

9.09% and 5.263%

Explanation:

The computation is shown below:

a. The current rate of unemployment is

= Number of Unemployed people ÷ labor force

= 10 ÷ 110

= 9.09%

b. The natural rate of unemployment is

= Separation rate ÷ Separation rate + finding rate

= 0.01 ÷ 0.01 + 0.18

= 0.01 ÷ 0.19

= 5.263%

These both should be expressed in a percentage forms

4 0
3 years ago
All of the following are benefits of going to college EXCEPT…
sammy [17]
All of these are benifits besides getting your dream job. College will help you further your education but it’s not guaranteeing that you’ll get your dream job.
8 0
3 years ago
Read 2 more answers
Zeto Bank requires its customers to provide their customer identification number, their respective passwords, and a one-time pas
olya-2409 [2.1K]

Answer:

the correct answer is "Mobile Banking".

Explanation:

Mobile banking is doing banking and related financial activities such as money deposits, withdrawals, bill payments, issuing standing orders, checking the balance amount and opening/closing accounts through the internet and the mobile devices.

Mobile banking is more popularized through the launch of new applications in the iOS and Android platforms.

Mobile banking has made it easier for the customers to do banking related activities and it has made it easier for the banks to process more transactions without increasing their number of employees.

7 0
3 years ago
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