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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The correct answer is: [C]: "coinsurance" .
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Answer:
The answer is: $238,000
Explanation:
The City of Ruth should recognize as revenue the difference between their incurred qualifying expenditures in improving bike trails and the federal government reimbursement.
Revenue = $418,000 - $180,000 = $238,000 due from the federal government.
