Answer
The answer and procedures of the exercise are attached in a microsof excel document.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
FAIR depend on to build the jeopardy organization
agenda that is not like many other hazard management frameworks as the qualitative
assessment of many risk mechanisms via weighing machine with value assortments.
B, because monopolistic market sells homogeneous goods.When a firm raises its price,it loses all of the customers
Answer:
a. The risk premium on Risky Investment bond = 5.8
b. Such a change would decrease/reduce 4.2%
c. The expected default rate on the Risky Investment bond has decreased (1).
Explanation:
a. The risk premium on a risky investment is equal to the total return on a risky investment less the return on the risk free asset. The risky asset here gives an annual return of 7.1% while the risk free rate is 1.3%. So, the risk premium on the risky asset for additional risk is,
b. A reduction in the annual return on the risky asset will decrease/reduce the interest rate spread which is equal to the difference between the return of the risky and risk free asset. The new spread will be equal to,
c. The risk free rate is expected to be the same as no information is provided. Besides, a fall in annual rate of risky investment means that there is a reduction in the riskiness of such an investment and that would mean that there is a reduction in the default risk in turn leading to a reduction in compensation for default and the default rate.
The risk is made up of risk free + maturity risk + liquidity risk and default risk.
Answer: The answer is provided below
Explanation:
Hudson had negotiated the check to Bishop with the full knowledge on the existing claim by Ripley that the solar panels installed by him were not been in working condition could be due to a fault at his end and he had not discharged his part of the contractual obligation for being entitled to the payment.
Based on the National Check Fraud Center, the payee can only sue the drawee who is Ripley if the underlying obligation for which the check is given is extinguished. Since Hudson had failed to discharge his part of his obligation for receiving the check from Ripley, Bishop cannot sue Ripley for dishonoring the check.