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Semenov [28]
3 years ago
11

Assume the following: The real risk-free rate, r*, is expected to remain constant at 3%. Inflation is expected to be 3% next yea

r and then to be constant at 2% a year thereafter. The maturity risk premium is zero. Given this information, which of the following statements is CORRECT? The yield curve for U.S. Treasury securities will be upward sloping.
A 5-year corporate bond must have a lower yield than a 5-year Treasury security.

A 5-year corporate bond must have a lower yield than a 7-year Treasury security.

The real risk-free rate cannot be constant if inflation is not expected to remain constant.

This problem assumed a zero maturity risk premium, but that is probably not valid in the real world.
Business
1 answer:
DaniilM [7]3 years ago
7 0

Answer:

This problem assumed a zero maturity risk premium, but that is probably not valid in the real world.

Explanation:

Consider the following definition

Maturity risk premium determines a bond’s price. Other risks include the chance that the bond issuer will fail to make its payments and the risk that you won’t be able to quickly find a buyer for the bond when you want to sell it, forcing you to lower your asking price.

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Data used in budgeting: Fixed element per month Variable element per tenant-day Revenue - $ 34.50 Wages and salaries $ 2,500 $ 7
zheka24 [161]

Answer:

$4,001 unfavorable

Explanation:

The computation of the revenue variance is shown below:

Revenue variance = Revenue at Flexible budget - Actual revenue

where,

Revenue at flexible budget is

= 3,630 × $34.50

= $125,235

And, the actual revenue is $121,234

So, the revenue variance is

= $125,235 - $121,234

= $4,001 unfavorable

We simply deduct the actual revenue from the flexible budget revenue so that the revenue variance could come

3 0
3 years ago
The fundamental belief behind the market-oriented us economy is that firms are in the best position to know if their actions wil
JulijaS [17]

The fundamental belief behind the market-oriented US economy is that firms are in the best position to know if their actions will cause antitrust laws to be being broken and allow them to work more efficiently. This is further explained below.

<h3>What is an Economy?</h3>

Generally, the status of a country in terms of commodities and services production and consumption.

In conclusion, Firms are in the best position to ascertain the effect of their actions on the economy.

Read more about Economy

brainly.com/question/2421251

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3 0
2 years ago
Parents put $ 1000 into a savings account at the birth of their daughter. When their daughter is 18 years old, the money in the
kotykmax [81]

Answer:

408.611%

Explanation:

8 0
3 years ago
Read 2 more answers
Training is a way for employers to provide To enable employees to protect themselves and other injuries
oksano4ka [1.4K]

The question is incomplete. Here is the complete question

Training is a way for employers to provide _______ to enable employees protect themselves and others from injuries

(a) Idea

(b) Tools

(c) Interaction

(d) Money

Answer:

Interaction

Explanation:

It is necessary for employers to organise training programs with employees that are exposed to various hazards in the workplace. Training helps to provide a form of interaction between both employers and employees, it enables them to discuss on ways to counters different accidents that might happen when working.

Training enables the employees to express their view on areas that they are not completely sure of, it is now left for the employers to hire a professional to train each employees on the rules and guidelines to follow inorder to prevent any form of accident.

8 0
3 years ago
Demand for home computers has increased yet the price has fallen.Explain this
dexar [7]

Answer:

cost of manufacturing

Explanation:

In the old days the price to make computers was very high so to make profit computers used to be even more expensive. But as time went on people learned to use less expensive materials to make computers and competition against other companies made them lower the prices. Due to that the demand for computers has risen.

4 0
3 years ago
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