Answer: 1.8%
Explanation:
Liquidity Premium theory posits that investors prefer more liquid securities to less liquid ones.
It can also be used to calculate expected interest by relating to other bond returns.
The formula is;
Interest Rate expected in nth year = (Sum of individual interest rates in n years)/n + Liquidity Premium in nth year
The premium provided is for the two - year bond and the return on the 2 year bond is also given.
Plugging the figures in gives;
1.6% = (1.2% + One year bond expected interest) / 2 + 0.1%
1.6% - 0.1% = (1.2% + interest) / 2
1.5% * 2 = 1.2% + interest
3% = 1.2% + interest
Interest = 3% - 1.2%
Interest = 1.8%
Answer:An entrepreneur
Explanation:
An entrepreneur is an individual who starts and runs a business with limited resources and planning, and is responsible for all the risks and rewards of her business venture.
Historical cost refers to the original cost of the equipment, which is shown as an asset in on the balance sheet. Whenever the company purchased the equipment, that price is what stays. In this case, the original cost of the equipment is $150,000, so the historical cost is $150,000.