The following are sales revenues for a large utility company for years 1 through 11. Forecast revenue for years 12 through 15. B
ecause
we are forecasting four years into the future, you will need to use linear regression as your forecasting method. (Enter your answers in
millions.)
YEAR
01 OUA
REVENUE (MILLIONS)
$4,869.
5,069.9
5,522.7
5,734.3
5,503.6
5.195.1
$5, 101.3
5,107.0
5. 552.3
5,744.8
5,863.0
Forecast
Period
12
13
15
we are forecasting four years into the future, you will need to use linear regression as your forecasting method. (Enter your answers in
millions.)
YEAR
01 OUA
REVENUE (MILLIONS)
$4,869.
5,069.9
5,522.7
5,734.3
5,503.6
5.195.1
$5, 101.3
5,107.0
5. 552.3
5,744.8
5,863.0
Forecast
Period
12
13
15
1 answer:
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Answer:
Ans. The equilibrium rate of return on a 1-year Treasury bond is 6.65% (please check the explanation)
Explanation:
Hi, well, this type of bonds exist so people can avoid the time value of money risk, in other words, to keep money save from inflation and provide a risk free return at the same time. From a part of the text I can tell that the person who wrote it wanted to add up the risk free rate and the inflation rate, that is 3.05%+3.60% =6.65%.
This is why I wrote this answer, but the truth is that since they are both effective rates (risk free rate and inflation), they need to be add as effective rates, that is:
Therefore
So the real equilibrium rate of return is 6.76%, but for the sake of the question, I wrote 6.65%.
Best of luck.