The spread between the interest rates on bonds with default risk and default-free bonds is called the risk premium.
A default-free bond is a bond in which the bond issuer would not miss scheduled payments of either the coupon or principal. Bonds issued by the government are generally considered to be default-free. This is because the government can print money to make payments.
A bond with a default risk is a bond in which the bond issuer can miss scheduled payments of either the coupon or the principal. Bonds issued by private individuals are generally considered to be bonds with default risk.
Bondholders usually demand a compensation for holding bonds with a default risk. This compensation is known as risk premium.
Risk premium = return on bonds with default risk - return on default- free bond.
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Answer:
The answer is "4200"
Explanation:
Please find the complete question in the attached file:
Calculating the variable cost in km:
Calculating the fixed cost:
Answer:
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Explanation:
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The statement " whether employer-sponsored or privately purchased, disability insurance plans will cover 70% of your lost income" is: b) False.
<h3>What is disability insurance plans?</h3>
Disability insurance plans can be defined as an insurance plan that help to cover the cost of people that are physically disabled.
When a person is disable due to work hazard the employers may tend to provide short-term or long term disability insurance plans that will help to provide income to disable person.
Therefore the statement " whether employer-sponsored or privately purchased, disability insurance plans will cover 70% of your lost income" is: b) False.
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Answer:
$280,000
Explanation:
Computation for the company’s residual income for the year
Using this formula
Residual Income=Operating income- (Average operating assets×Rate of return)
Let plug in the formula
Residual Income = $450,000 – ($1,700,000 x 10%)
Residual Income=$450,000-$170,000
Residual income=$280,000
Therefore te company’s residual income for the year will be $280,000
