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grandymaker [24]
2 years ago
5

Suppose the inflation premium is 2 percent and the nominal interest rate is 1 percent. Instructions: In part a, enter your answe

r as a whole number. In part b, round your answer to 1 decimal place. If you are entering any negative numbers be sure to include a negative sign () in front of those numbers a. What is the real interest rate? b. What if the inflation premium is 3 percent while the nominal interest rate is 0.5 percent?
Business
1 answer:
Fudgin [204]2 years ago
8 0

Answer:

(a) Real Interest Rate   = -1 %

(b) Real Interest Rate   = -2.4 %

Explanation:

Real Interest Rate = (1+ Nominal Interest rate)/(1+Inflation Rate) -1

 (a)Real Interest Rate = (1+0.01)/(1+0.02)-1

                                    = -1 %

 (b) Real Interest Rate = (1+0.005)/(1+0.03) -1

                                      = -2.4 %

Real Interest Rate is an interest rate that has been adjusted to remove the effects of inflation to reflect the real cost of funds to the borrower and the real yield to the lender or to an investor.

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Bess [88]

While both types of insurance are required, if you do not have health insurance, you will be required to pay a fee on your taxes.

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6 0
3 years ago
Determine whether the statement describes a descriptive or inferential statistic. a recent poll of 2707 home owners in michigan
jolli1 [7]

The average price of a house in the u.s. is $265,000. this statement describes an Inferential Statistic.

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4 0
1 year ago
when preparing a trial balance, there are certain steps that need to be followed. place the following steps in the correct order
hjlf

Answer:i don’t know why this is right, but i’m here to help and have to have a 20 word count minimum to submit

Explanation:

3 0
8 months ago
Answered - expert verified
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8 0
2 years ago
Read 2 more answers
"At that time, the market price of ABC is $44. If the market rises to $58 and the call is exercised (the put expires out the mon
steposvetlana [31]

Answer:

600 loss

Explanation:

The computation of the gain or loss is shown below:

Since on Jan, there is a put option of 45 at $3 and the market rises to $58

So it losses by 13 points i.e

= 45 - 58

= 13

Now the total premium points collected is of 7 i.e

= 4 + 3

= 7

So, the remaining points left is

= 13 - 7

= 6

So for 6 points, the net loss is $600

7 0
3 years ago
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