Answer:
a. 10.93%
Explanation:
Cost of equity using CAPM formula is as follows;
CAPM ; r = risk free + beta (Market Risk Premium)
risk free (rRF) = 4.10%
beta ; b = 1.30
Market Risk Premium (MRP) = 5.25%
CAPM r; = 4.10% + 1.30(5.25%)
CAPM r = 4.10% + 6.825%
= 10.925%
Therefore, to 2 decimal places, cost of equity is 10.93% making choice A correct.
Answer:
b. receive and process bids for Treasury securities in preparation for the Treasury's auction of securities.
Explanation:
The Fed and their regional banks are authorized by the Federal Reserve Act of 1913 to act as fiscal agents if the Secretary of the Treasury requires them to do so. Theoretically, this shouldn't be a normal activity, it should only happen on demand of the Secretary of the Treasury.
Answer:
consumption or comparing the marginal product of capital to the depreciation rate.
Explanation:
The two methods that measures the capital level of the golden rule is the consumption or it should compared the capital marginal product with the depreciation rate. As the golden rule capital level shows the leval in which the consumption made in the steady rate should be maximized
So for this the above option should be considered
Therefore the other options are wrong
Answer:
A) negatively sloped.
Explanation:
Usually the demand for reserves is negatively sloped, like any normal demand curve, due to the inverse relationship between quantity demanded and price (interest rate is the price of money).
The demand curve for federal funds will have a negative slope until the interest rate paid on excess reserves equals the federal funds rate. At this point, the demand curve will become infinitely elastic, and therefore horizontal.