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Liono4ka [1.6K]
3 years ago
8

An investor buys a $10,000 par, 4.25 percent annual coupon TIPS security with three years to maturity. If inflation every six mo

nths over the investor's holding period is 2.50 percent, what is the final payment the TIPS investor will receive
A. $10,213.00 B. $10,869.28 C. $11,822.25 D. $11,843.37 E. $12,201.11
Business
1 answer:
NeX [460]3 years ago
3 0

Answer:

D. $11,843.37

Explanation:

principal \times (1+\alpha)^6 \times (1+r_n)

We will adjust by inflation the principal, and then calculate the interest.

Inflation is 0.025 every six month, and it is compounding interest.

Our rate will be for six month as well. Because TIPs pay interest semianually as well.

principal \times (1+0.025)^6 \times (1+0.0425/2)

11,843.36903

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Answer: Option A

Explanation: In simple words, Short run budgets refers to the budgets which are made for a period of less than 12 months and long run budgets are made for a time period greater than one year.

Short run budgets are prepared for some specific assets such as supplying a new customer for one year.

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Suppose that the market equilibrium price for a good is $3.00. A nonbinding price ceiling in this market will result in a price
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above $3.00

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Price ceiling is binding if it is set below equilibrium price.

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A company pursuing vertical integration can gain market power over its competitors through all of the following EXCEPT: a. avoid
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Answer:

B. Improved adjustment to technological changes.

Explanation:

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In the given case, the company pursuing vertical integration can gain market power over its competitors through improved quality, reduction in cost, and reduction in operation cost, however, it does not improve adjustment to technological changes.

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3 years ago
What country first began to dismantle its welfare state? What was put in its place?
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Thank you for posting your question here at brainly. I hope the answer will help you. Feel free to ask more questions.

What country first began to dismantle its welfare state? <span>Chili. Democracy was restored.

</span>What was put in its place? <span>A pension plan replaced welfare.</span>
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