the rate expected on the treasury bill is 8.57%. enter answer as a percent rounded to 2 decimal places.
The real rate is 2.1 percent
The inflation rate is 3.4 percent
To find the rate which is to be expected on a treasury bill we have to apply fisher's equation
1+R= (1+r)(1+h)
Therefore, the rate on the treasury bill can be calculated as follows
1+R= (1+r)(1+h)
r= 3.4%
= 3.4/100
= 0.034
h= 5%
= 5/100
= 0.05
R= (1+r)(1+h)-1
= (1+0.034)(1+0.05)-1
= (1.034×1.05)-1
= 1.0857-1
= 0.0857×100
= 8.57%
A Treasury invoice (T-invoice) is a brief-term debt obligation backed via the U.S. Treasury Department with an adulthood of one year or less. Treasury bills are generally bought in denominations of $1,000 even as a few can attain a denomination of $five million.
let's say an investor purchases a par price of $1,000 T-bill with an aggressive bid of $950. whilst the T-invoice matures, the investor is paid $1,000, thereby income $50 in interest on the funding.
U.S. Treasury bills are auctioned on a regular schedule. individuals should purchase T-payments from the government using the TreasuryDirect internet site. it is free to register, and it'll function like a brokerage account that holds your bonds. in addition to bidding on new troubles, You also can install reinvestments into securities of an equal type and time period. as instance, you can use the proceeds from a maturing fifty-two-week invoice to shopping for some other fifty-two-week invoice. sure brokerage corporations can also permit buying and selling in U.S. Treasuries.
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Answer:
Forgery or Alteration Coverage Form.
Explanation:
The travel agency loss would be covered under Forgery or Alteration coverage form.
Under Commercial Crime insuring agreement, It insures an individual or business against the forgery or alteration of financial instruments e.g promissory notes, drafts, and checks with respect to payment of a sum of money that was made or drawn by the insured or anyone acting on his/her behalf such as next of kin.
Answer:
The required return for the new project is 6.87%
Explanation:
In order to calculate the required return for the new project we would have to calculate the Weighted Average Cost of Capital (WACC) adjusted by risk adjustment factor
.
The Weighted Average Cost of Capital (WACC) = [After Tax Cost of Debt x Weight of Debt] + [Cost of equity x Weight of Equity]
After -tax Cost of Debt = 3.40%
Cost of Equity = 10.80%
Weight of Debt = 0.39
Weight of Equity = 0.69
Therefore, the Weighted Average Cost of Capital (WACC) = [After Tax Cost of Debt x Weight of Debt] + [Cost of equity x Weight of Equity]
= [3.40% x 0.39] + [10.80% x 0.69]
= 1.32% + 7.45%
= 8.77%
The required return for the new project = Weighted Average Cost of Capital – Risk Adjustment Factor
= 8.77% - 1.90%
= 6.87%
The required return for the new project is 6.87%
Answer:
Product line Pricing
Explanation:
The reason is that when the manufacturer produces a number of quality range products and price them accordingly. This means that the customer who has different level of purchasing power can fulfill his needs and wants accordingly. So producing a single product limits the satisfying of needs and wants of small customer segment whereas producing multiple product range helps in targeting a range of customer segments. The different prices of tablets charged here for different products actually reflects the prices of the products.
True.
I hope this helps! :)
