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belka [17]
4 years ago
8

You have determined the following data for a given bond: Real risk-free rate (r*) = 3%; inflation premium = 8%; default risk pre

mium = 2%; liquidity premium = 2%; and maturity risk premium = 1%. What is the nominal risk-free rate, rRF?
a. 10%
b. 13%
c. 11%
Business
1 answer:
vagabundo [1.1K]4 years ago
4 0

Answer: 16%

Explanation:

Interest rate on long term treasury securities is calculated below using following formula:

Interest rate = Real risk-free rate + inflation premium + default risk premium + liquidity premium + maturity risk premium

= 3% + 8% + 2% + 2% + 1%

= 16%

Interest rate on long term treasury securities is 16%.

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A monopolistic seller of sports cars has traced out the following demand curve: 10 customers have willingness to pay (WTP) of $1
Romashka [77]

Answer:

The answer is: 1) II > I > III

Explanation:

<u>Pricing scheme I: $2 million profit</u>

  • Price $150,000
  • Contribution margin = $150,000 - $50,000 = $100,000
  • 35 units sold x $100,000 = $3.5 million
  • profit = $3.5 million - $1.5M = $2 million

<u>Pricing scheme II: 2.25 million profit</u>

  • Price $200,000
  • Contribution margin = $200,000 - $50,000 = $150,000
  • 25 units sold x $150,000 = $3.75 million
  • profit = $3.75 million - $1.5M = $2.25 million

<u>Pricing scheme III: $1.5 million profit</u>

  • Price $250,000
  • Contribution margin = $250,000 - $50,000 = $200,000
  • 15 units sold x $200,000 = $3 million
  • profit = $3 million - $1.5M = $1.5 million

8 0
3 years ago
Which of the following core societal values dimensions captures distinctions existing in societies based on mannerisms typically
irga5000 [103]

Answer:

<em>OPTION(B) is correct.</em>

Explanation:

In a society CSV dimensions captures distinctions, <em>based on characteristics </em>that pursue<em> to control and handle a community, organization or a small group of people</em> is generally known as "Power distance."

This is a type of distance which is been differentiated into two types of power distances, the <em>first one</em> is high power distance and the <em>second one</em> is low power distance.

5 0
3 years ago
C. D. Rom has just given an insurance company $34,500. In return, he will receive an annuity of $4,200 for 20 years. At what rat
vivado [14]

Answer:

10.53%

Explanation:

In this question, we use the RATE formula that is shown in the attachment. Kindly find it below:

Data provided  

Present value = $34,500

Future value or Face value = $0

PMT = $4,200

NPER = 11 years × 2 = 22 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative

So, after solving this, the rate of return is 10.53%

8 0
4 years ago
When opening a checking or share draft account, which would likely be the most important consideration?
Nonamiya [84]

Answer:

  • When opening a checking or share draft account, which would likely be the most important consideration?

The stability of the Union or bank in which you are opening your account.

  • What incentives are provided for you to open an account?

The interest rate. The easy access to my funds. The trackability of the transactions. The possible application for a credit in the future.

  • What is the current interest rate paid on funds left in the account?

In a High Rate account is 2,01% in a regular rate 1,90%

  • What are the terms and interest rates on their certificates of deposit (CDs)?

The terms may vary from 1 day until 2160 days.

6 months – 6 years: Goldman Sachs Bank USA – 0.60% APY – 2.35% APY; $500 minimum deposit to open.

30 days – 5 years: BrioDirect – 0.05% APY – 2.05% APY; $500 minimum deposit to open.

6 months – 5 years: Capital One – 0.60% APY – 1.60% APY; no minimum deposit to open.

  • What types of fees are charged for maintaining and using the account?

The $4 or $5 monthly maintenance fee.

The international withdrawls fee. (varies in each bank policy)

7 0
3 years ago
Which rater error would likely lead employees to believe that no aspects of their performance need improvement?
fenix001 [56]
Halo error would most likely lead employers to believe that no aspects of their performance needs improvement
5 0
3 years ago
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