Answer:
The difference between two securities is 0.89%.
Explanation:
Inflation premium for the next three and five years:
Inflation premium (3) = (1.6% + 3.05% + 3.85%) ÷ 3
= 2.83%
Inflation premium (5) = (1.6% + 3.05% + 3.85% + 3.85% + 3.85%) ÷ 5
= 3.24%
Real risk-free rate = 2.35%
Since default premium and liquidity premium are zero on treasury bonds, we can now solve for the maturity risk premium:
Three-year Treasury securities = Real risk-free rate + Inflation premium (3) + MRP(3)
6.80% = 2.35% + 2.83% + MRP(3)
MRP (3) = 1.62%
Similarly,
5-year Treasury securities = Real risk-free rate + Inflation premium (5) + MRP(5)
8.10% = 2.35% + 3.24% + MRP(3)
MRP (5) = 2.51%
Thus,
MRP5 - MRP3 = 2.51% - 1.62%
= 0.89%
Therefore, the difference between two securities is 0.89%.
Answer and Explanation:
The calculation is given below:
a. The debt ratio is
= Total liabilities ÷ total assets
= $148,000 ÷ $270,000
= 0.5 times
b. The debt/equity ratio is
= Debt ÷ equity
= $148,000 ÷ ($270,000 - $148,000)
= $148,000 ÷ $122,000
= 1.21 times
c. The times interest earned ratio is
= earning before interest and taxes ÷ interest expense
= $81,000 ÷ $17,000
= 4.76 times
The type of externality where market equilibrium quantity produced will be more than socially optimal quantity in absence of governemtn intervention is Negative externality.
Let understand that whenever a production of good or service negatively affect the unrelated third party who is not directly involved in a market transaction, it is said that negative externality exists in the scenario.
A very good example of commonly cited Negative Externalities are air pollution and noise pollution which was caused during production an affects unrelated third party.
If there is presence of government intervention in the production, then, the production of goods or service will be halted.
Therefore, in conclusion, this type of externality is called the Negative Externality.
Read more about Negative Externality here
<em>brainly.com/question/13901028</em>
Answer:
1st and 2nd options are correct.
- Its intended goal is to protect the interests of those who hold equity in the bank.
- The amount of capital required depends on the type of assets the bank holds.
Explanation:
Capital requirement for a financial institution, such as a bank is the amount of capital they need to pay off their liabilities. Every bank has a reserve ratio which is a small part of total deposits that is enforced upon banks to fulfill all the liabilities. The intended goal of capital is to protect and preserve the interest of depositors and equity holders. Similarly, the reserve ratio of bank substantially depends upon the type of assets bank holds, for liquid assets, the capital requirement is more as compared to liquid assets. Since more liquid asset means that a bank can convert them into cash instantly which is why the capital requirement is less for liquid assets.
Answer:
Cost per equivalent whole unit is a. $3.30
Cost to work in process b. $266,525
Explanation:
Cost per equivalent units is :
Direct Material Cost $70,500 * 100% =
Conversion Cost $34,050 * 40% = 13,620
Direct Material Added $342,000 * 100% =
Conversion Costs $352,950 * 20% = 70,590
Total Cost is $496,710
Equivalent units during February is 225,000
Cost per equivalent unit is $3.30
