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damaskus [11]
4 years ago
14

Suppose the rate of return on a 10-year T-bond is 4.05%, the expected average rate of inflation over the next 10 years is 2.0%,

the MRP on a 10-year T-bond is 0.9%, no MRP is required on a TIPS, and no liquidity premium is required on any Treasury security. Given this information, what should the yield be on a 10-year TIPS? Di
Business
1 answer:
Keith_Richards [23]4 years ago
6 0

Answer:

1.15%.

Explanation:

This can be calculated as follows:

Yield be on a 10-year TIPS = Rate of return on the 10 year T-bond - Average Inflation - Market Risk Premium (MRP)

Therefore, we have:

Yield be on a 10-year TIPS = 4.05% - 2.0% - 0.9% = 1.15%

Therefore, the yield on a 10-year TIPS should be 1.15%.

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Monopoly insurance is the only company marketing a certain line of insurance in a state. after complaints from several consumers
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It makes the biloating rating obecyive monplly to the form of the inverstjgatdd
6 0
4 years ago
A survey of entrepreneurs focused on their job characteristics, work habits, social activities, leisure time, etc. One question
SVEN [57.7K]

Answer: Hello below is the complete question

A survey of entrepreneurs focused on their job characteristics, work habits, social activities, leisure time, etc. One question put to each entrepreneur was, "What make of car (U.S., Europe, or Japan) do you drive?" The responses (number in each category) for a sample of 100 entrepreneurs are summarized below. The goal of the analysis is to determine if the proportions of entrepreneurs who drive American, European, and Japanese cars differ.

U.S. Europe Japan

40 35 25

In order to determine whether the true proportions in each response category differ, a one-way chi-square analysis should be conducted. Suppose the p-value for the test was calculated to be p=0.1738 . What is the appropriate conclusion to make when testing at α = 0.10?

Answer : The conclusion to be drawn is that We cannot reject the Null hypothesis if we use a one-way chi square analysis because at α = 0.1 from the chi-square  tabulated p-value = 0.584 while the calculated /given p-value is = 0.1738

Explanation:

Data given:

p-value = 0.1738

α = 0.10

sample size = 100

U.S cars = 40,      Europe cars = 35,   Japan cars = 25

The conclusion to be drawn is that We cannot reject the Null hypothesis if we use a one-way chi square analysis because at α = 0.1 from the chi-square  tabulated p-value = 0.584 while the calculated /given p-value is = 0.1738

6 0
3 years ago
Consider a hypothetical closed economy in which households spend $0.70 of each additional dollar they earn and save the remainin
MAVERICK [17]

(a) Marginal propensity to consume (MPC) = 0.7

(b) Multiplier of this economy:

     = 3.33

(c) Decrease government purchases by $300 billion,

Initial change in consumption = Change in government purchases × MPC

                                                 = $300 × 0.7

                                                 = -$210 billion

(d) This decreases income yet again, causing a second change in consumption equal to:

= Initial change in consumption × MPC

= -$210 × 0.7

= -$147 billion

(e) The total change in demand resulting from the initial change in government spending is:

= Change in government purchases × Multiplier

= $300 × 3.33

= -$1 trillion

6 0
3 years ago
An individual who wants others to pay for public goods, but plans to use those goods for their own purposes, is often referred t
Ann [662]

Answer:

free rider

Explanation:

Free Rider is someone who would not choose to pay for a certain good or service, but who would get the benefits of it anyway if it were provided as a public good.

7 0
3 years ago
Read 2 more answers
If the economy is initially at long-run equilibrium and aggregate demand declines, then in the long run the price level
torisob [31]

Answer:

(D) is the same and output is lower than in the original long-run equilibrium.

Explanation:

In the long term the prices are flexible. They adapt to the new situation of a decrease in the demand. This is consistent with with a lower output, consecuences of the decreasing in the demand.

7 0
3 years ago
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