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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Option A
A new accounting principle can be adopted with stockholders' approval is not true of accounting principles
<u>Explanation:</u>
Accounting principles are the dictates and guidelines that firms must comprehend when describing financial data. The Financial Accounting Standards Board (FASB) publishes a regulated collection of accounting principles in the U.S. applied to as generally accepted accounting principles (GAAP). GAAP strives to develop the accuracy, flexibility, and comparability of the presentation of financial information.
Since accounting principles vary beyond the world, investors should practice discretion when associating the financial statements of organizations from various countries. Accounting principles help dictate the world of accounting according to prevailing dictates and guidelines.
Answer: Reactive change
Explanation:
The reactive change is one of the type of concept that is specifically implemented in an organization by essential changing made in the system without any delay.
In this type of changes, the changes are made by the outside forces in an organization and with the helps of this change the companies basically interesting the various types of policies for the flexibility of the employees.
According to the given question, the Given example is best illustrating the reactive change concept as it is necessary for the employees of the company. Therefore, reactive change is the correct answer.
Based on the coupon rate, the call price and the selling price, the yield to call is 11.06%.
<h3>How is the yield to call found?</h3>
The formula to find it is:
= (Coupon + (Call price - Current price) / Number of periods ) / ( (Call price + Current price) / 2 ) x 2
Solving gives:
=( (12%/2 x 1,000) + (1,120 - 1,110) / 6 semi annual periods ) ) / ( (1,120 + 1,110) / 2) x 2
= (61.667 / 1,115) x 2
= 11.06%
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