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PilotLPTM [1.2K]
2 years ago
15

Casey has ​$1 comma 000 to invest in a certificate of deposit. Her local bank offers her 2.50​% on a​ twelve-month FDIC-insured

CD. A nonfinancial institution offers her 5.20​% on a​ 1twelve-month CD. What is the risk​ premium? What else must Casey consider in choosing between the two​ CDs?
Business
1 answer:
frutty [35]2 years ago
6 0

Answer:

the risk premium = return of the deposit - risk free deposit return

risk premium = 5.2% - 2.5% = 2.7% or $27 for a $1,000 CD

Besides the investment risk, Casey must also consider the inflation rate and taxes. The inflation rate lowers the real interest earned by Casey: real interest rate = nominal interest rate - inflation rate. And she must also find out how the return from the non-financial institution is taxed, if it can be taxed as capital gains or regular income.

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Answer:

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Explanation:

a.

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4 0
3 years ago
PLEASE HELP
bonufazy [111]

Answer:

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Explanation:

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Simora [160]

Answer:

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The purchase or a new home is considered an investment and thus it is added to investment when calculating GDP .

I hope my answer helps you

4 0
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