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umka21 [38]
3 years ago
13

Suppose that you buy a TIPS (inflation-indexed) bond with a 1-year maturity and a coupon of 7% paid annually. Assume you buy the

bond at its face value of $1,000, and the inflation rate is 8%.
(a) What will be your cash flow at the end of the year?
(b) What will be your real return?
(c) What will be your nominal return?
Business
1 answer:
Kryger [21]3 years ago
7 0

Answer:

at maturity I will receive 1,155.6

the real return is 7%

the nominal will be 15.56%

Explanation:

As it is indexed it will paid a real rate of 7% adjusted for 8% inflation

1,000(1+r)(1+\delta)=Amount

1,000 x 1.07 x 1.08 = 1,155.6 received at maturity

no know the nominal rate we do:

\frac{Amount}{Principal}-1

\frac{1,155.6}{1,000}-1

nominal = 0.1556 = 15.56%

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Molodets [167]

Based on the various cost rates and hours for XYZ Company, the labor efficiency variance is $2,000 unfavorable

<h3>What is the labor efficiency variance?</h3>

This can be found as:

= (Actual hours x Standard rate) - (Standard hours x Standard rate)

Solving gives:

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5 0
1 year ago
You are holding a stock that has a beta of 1.39 and is currently in equilibrium. The required return on the stock is 20.47%, and
r-ruslan [8.4K]

Answer: 26.73%

Explanation:

You can calculate the expected return using the Capital Asset Pricing Model (CAPM).

Formula is:

Expected return = Risk free rate + beta * (Market return - risk free rate)

Use the previous figures to solve for the risk free rate:

20.47% = Rf + 1.39 * (16.50% - Rf)

20.47% = Rf + 22.935% - 1.39R

20.47% - 22.935% = Rf - 1.39Rf

-2.465% = -0.39Rf

Rf = -2.465% / -0.39

= 6.32%

New expected return is:

= 6.32% + 1.39 * (21% - 6.32%)

= 26.73%

7 0
3 years ago
Keiko manages a team of graphic designers. She distributes a document describing in detail each task for an upcoming project. Ea
seraphim [82]

Answer:

responsibilities scope

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Keiko is describing responsibilities for each team member so each one knowns what is expected from them

4 0
3 years ago
Read the passage. Then answer the question that follows. Nikia designs and produces board games that she sells online. She forme
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I would say the C. is the correct answer, because if the 3D Printer prints the pieces faster, the games are sold more frequently. I hope this helps, and that it makes sense to you.

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A rapid transit vehicle manufacturer produces two types of vehicles that have different dynamic characteristics and door I capac
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Capacity ratio is a comparison of the number of working days in the budgeted period as well as the actual number of working days in the same period.

<h3>What is the capacity ratio?</h3>

Your information is incomplete. Therefore, an overview of the capacity ratio will be given.

Capacity ratio defines to show the capacity. The capacity utilization ratio simply measures whether the total direct labor hours worked in a production cost center in a period was either greater or less than what was budgeted.

It is calculated as:

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