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emmasim [6.3K]
3 years ago
8

A bond that pays interest annually yields a rate of return of 7.50 percent. The inflation rate for the same period is 2 percent.

What is the real rate of return on this bond?
Business
1 answer:
Jlenok [28]3 years ago
7 0

Answer:

5.39%

Explanation:

Given that,

Bond that pays interest annually yields a rate of return = 7.50 percent

Inflation rate for the same period = 2 percent

Real rate = [(1 + nominal rate) ÷ (1 + inflation rate)] - 1

Real rate = [(1 + 0.0750) ÷ (1 + 0.02)] - 1

               = (1.075 ÷ 1.02) - 1

               = 1.0539 - 1

               = 0.0539 or 5.39%

Therefore, the real rate of return on this bond is 5.39%.

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How much must harry's hardware deposit at a 14.5% annual interest for 240 days in order to earn $500 in simple interest?
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To get the formula for the principal, we will use the formula for the interest and derived it from there:

I = Prt is the equation then it will be P = I /rt since we are looking for the principal.

 

P = I /rt

 

= $500 / (0.145 x 240/360)

 

= $500 / 0.0967

 

= $5170.63

 

To check:

I = Prt

 

= $5170.3 x 0.145 x 240/360

 

= $499.8 or $500

5 0
3 years ago
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nika2105 [10]

Answer:

One is lower risk

Explanation:

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Eddie just landed his first job out of college, and he’s excited about the position. However, Eddie needs to be dressed up every
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Answer:

Why is it important to assess various credit options before making a decision on how to pay for

Explanation:

at questions should Selena ask before deciding on this option?

OPTION 3: Get a private college loan from her bank, Wells Fargo, which is currently offering fixed rates between 5.94% and 10.92%

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OPTION 2: Use $1250 of the $1500 he has saved in an Emergency Fund

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OPTION 3: Get a loan from Lending Club at an APR of 24.99%

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OPTION 1: Open a 0% (for the first 6 months) credit card

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OPTION 2: Use $1250 of the $1500 he has sa

Eddie just landed his first job out of college, and he’s excited about the position. However, Eddie needs to be dressed up every day and has no appropriate clothes right now. Eddie figures it will cost about $1250 to start a professional wardrobe.

OPTION 1: Open a 0% (for the first 6 months) credit card

PROS

CONS

What questions should Eddie ask before deciding on this option?

OPTION 2: Use $1250 of the $1500 he has saved in an Emergency Fund

PROS

CONS

What questions should Eddie ask before deciding on this option?

OPTION 3: Get a loan from Lending Club at an APR of 24.99%

PROS

CONS

What questions should Eddie ask before deciding on this option?

Selena is about to enter her senior year of college, when all of a sudden she realizes her school raised the tuition cost, and she’s short $6600 in her financial aid package.

OPTION 1: Charge the payments on the joint credit card account she shares with her mom, at a 14.99% APR

PROS

CONS

What questions should Selena ask before deciding on this option?

OPTION 2: Apply for a Federal Student Loan to cover the cost

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CONSbwls

What questions should Selena ask before deciding on this option?

OPTION 3: Get a private college loan jsiaolqhs alkas

4 0
3 years ago
You are speaking with a customer who wants to cancel their subscription because of a family emergency. You told the customer tha
Karolina [17]

Based on the fact that the subscription is non refundable, it is important that you calmly reassert the position of the company and commiserate with them.

<h3>What is Customer Care?</h3>

This refers to a group of people who are in charge of listening to customer complaints about a particular brand of goods or services.

WIth this in mind, we can see that the best thing to do with this person in this case is to calmly reassert the situation and if the customer is adamant, escalate the issue to the appropriate authorities.


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5 0
2 years ago
An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 16% and a standard devi
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The proportion of the optimal risky portfolio that should be invested in stock A is 0%.

Using this formula

Stock A optimal risky portfolio=[(Wa-RFR )×SDB²]-[(Wb-RFR)×SDA×SDB×CC] ÷ [(Wa-RFR )×SDB²+(Wb-RFR)SDA²]- [(Wa-RFR +Wb-RFR )×SDA×SDB×CC]

Where:

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Stock B Expected Return  (Wb)= 12%

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Let plug in the formula

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Stock A optimal risky portfolio=(0.000054-0.000054)÷(0.000702-0.000216)

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Inconclusion the proportion of the optimal risky portfolio that should be invested in stock A is 0%.

Learn more here:

brainly.com/question/21273560

6 0
2 years ago
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