The average nominal risk premium on the long-term government bonds was 2.6 percent.
A risk premium is the expected investment return on an asset that is higher than the risk-free rate of return. The risk premium on an asset is a form of compensation for investors. It compensates investors for tolerating the additional risk in a given investment over that of a risk-free asset. Subtracting the return on risk-free investment from the return on investment yields the risk premium.
The nominal risk premium is:
Nominal Risk-Free Rate - Inflation Premium = Real Risk-Free Rate. Nominal rates are the rates we encounter on a daily basis, such as interest rates from banks and other financial institutions.
Nominal risk premium = 6.1 % -3.5 %
= 2.6%.
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Answer:
The law of diminishing marginal utility says that the marginal utility from each additional unit declines as consumption increases. 1. The marginal utility can decline into negative utility, as it may become entirely unfavorable to consume another unit of any product.
Answer:
b. Relevant range includes all possible levels of activity that a company might experience.
Explanation:
In the cost-volume profit analysis, there are following assumptions which are described below:
1. There are two types of cost i.e variable cost and the fixed cost.
2. The sale mix remains same in case of multi product company
3. The volume of sales equals to volume of production
4. The cost is linear over the appropriate range i.e variable cost per unit and the fixed cost which remains same plus the selling price is also constant.
The fast burger is not an example of mechanistic
organization, therefore, it is false. It is because a mechanistic organization
should provide rules and tasks that are provided to each employee and the authority
should be centralized—in the given scenario, the mechanistic organization is
not seen above.
Answer:
modified rebuy
Explanation:
A modified rebuy takes place when a buyer decides to make another purchase form his/her usual vendor, but the new purchase includes some different items or different characteristics than previous purchases. In this case, Levi is modifying the characteristics of the goods that he usually purchases from his usual vendor.
