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Brilliant_brown [7]
2 years ago
8

Suppose the real risk-free rate is 3.00%, the average expected future inflation rate is 5.90%, and a maturity risk premium of 0.

10% per year to maturity applies, i.e., MRP = 0.10%(t), where t is the number of years to maturity. What rate of return would you expect on a 1-year Treasury security, assuming the pure expectations theory is NOT valid? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average. a. 10.35% b. 7.29% c. 8.91% d. 9.00% e. 9.27%
Business
1 answer:
never [62]2 years ago
5 0

Answer:

the rate of return that expected on one year treasury security is 9.00%

Explanation:

The computation of the rate of return that expected on one year treasury security is as followS

= Risk free rate + average expected future inflation rate + maturity risk premium

= 3.00% + 5.90% + 0.10%

= 9.00%

Hence, the rate of return that expected on one year treasury security is 9.00%

Therefore the correct option is d.

And, the rest of the options are wrong

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Answer:

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The person could segment the market grounded on the performance, quality, special features, customer service and other advantages.

Therefore, the fact that the some of the customers want the flavored water bottles and others want to have it with the added minerals, it provides an opportunity for the benefit segmentation.

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Answer: B) The supply of goods like clothes will decrease.

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8 0
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What factor supports maintaining a dual income?
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3 0
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2 years ago
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