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BlackZzzverrR [31]
3 years ago
9

Suppose the real risk-free rate is 2.50% and the future rate of inflation is expected to be constant at 4.10%. What rate of retu

rn would you expect on a 5-year Treasury security, assuming the pure expectations theory is valid? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average.
Business
1 answer:
Yakvenalex [24]3 years ago
5 0

Answer: 6.6%

Explanation:

The Pure Expectations Theory believes that the future long term rate is a reflection of future short term rates.

In terms of a 5 Treasury Security then, the rate of return to be expected is the risk free rate adjusted for inflation.

The Treasury Security has no risk but for inflation risk hence this is all that should be catered for.

Rate of Return on 5 year Treasury Security = Real Risk Free Rate + Inflation Rate

= 2.5% + 4.1%

= 6.6%

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money that is provided by the defendant to ensure his or her appearance in court is reffered to as----------------.
faust18 [17]

Answer:

Bail

Explanation:

Bail is just a measure of cash that is saved with the court to guarantee that you appear for all court procedures. You can post your bail in real money with the court, and you will at that point be discharged from authority.  

In the event that the litigant needs more money to post the whole bail, the court will acknowledge a bail security.  

The reason for bail is to guarantee that a respondent returns for future court appearances.

8 0
3 years ago
Why might the owner of a new technology business decide to incorporate her company as a corporation rather than operating as a s
Oksanka [162]

Answer:

Explanation:

B or C are the benefits of sole proprietorship,

D can be used by any organization,

so only A, raise capital by selling stock in company.

5 0
2 years ago
Read 2 more answers
Golden has a receivable due in 30 days for 30,000 euros. The treasurer is concerned that the value of the euro relative to the d
attashe74 [19]

Answer:

The answer is c. Enter into a forward contract to sell 30,000 euros in 30 days

Explanation:

The risk Golden is facing is the exchange rate risk. Specially, as of the firm's concern, 30,00 euros they will receive in 30 days will not be worth as much as it is now because the Euro is expected to be depreciated against the firm's domestic currency.

So, they may enter into a forward contract allowing them to sell 30,000 euros in 30 days ( take short position in Euro) at pre-determined exchange rate. By doing so, they effectively eliminate the exchange rate risk by lock-in the exchange rate at the day they receive 30,000 euro.

8 0
2 years ago
President Obama praised Cumberland Farms, a convenience store chain based in Framingham, Massachusetts, for empowering its emplo
Elina [12.6K]

Answer:

A) Communicate regularly about the firm’s progress toward meeting its strategic objectives as well as the threats and weaknesses that pose challenges.

D) Adopt a compensation plan that pays employees more when the company meets its goals.

Explanation:

If Cumberland Farms wanted to take other actions to empower its workforce, they should consider communicate regularly about the firm’s progress toward meeting its strategic objectives as well as the threats and weaknesses that pose challenges. this will allow employees to have a better idea of the company and can make better decisions.

They must also adopt a compensation plan that pays employees more when the company meets its goals which would motivate employees to make decisions that would benefit the company and work harder.

5 0
3 years ago
The cost of constructing a new parking lot at the company's office building would be recorded as:
Natalija [7]

Answer:

b. Land improvement.

Explanation:

Total assets include current assets, fixed assets, and intangible assets Current assets include cash, stock, receivable account, etc. Fixed assets include plant & machinery, property, facilities, furniture & equipment, land, etc.

And the intangible assets are trademarks, copyrights, goodwill, and other intellectual properties.

The main difference between land and land improvements is that the land is a non-depreciable asset plus it has unlimited life whereas land improvement is depreciated assets and it has a limited life.  

The example of land improvement includes the parking lot, lighting, fences, etc

6 0
3 years ago
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