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zimovet [89]
3 years ago
13

If the CPI is 170 at the beginning of the year and 181 at the end, and the bank is paying a nominal interest rate of 6 percent,

we see that
Business
1 answer:
igomit [66]3 years ago
3 0

Answer:

a. the real interest rate is negative.

Explanation:

Options <em>a. the real interest rate is negative.  b. the nominal interest rate is negative. c. the nominal interest rate is zero.  d. the real interest rate is positive.  e. the real interest rate is equal to zero."</em>

<em />

If the CPI is 170 at the beginning of the year and $181 at the end.  Then, inflation rate between these two years = (181 - 170) /170 = 0.06471 = 6.47%

The given Nominal interest rate = 6%

Thus, Real interest rate = Nominal interest rate - inflation rate

Real interest rate = (6 - 6.47)%

Real interest rate = -0.47%

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Turbotax

Explanation:

it's easy to use especially for first timers.

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2 years ago
The cash coverage ratio is used to evaluate the:Liquidity of a firmSpeed at which a firm generates cashLength of time that a fir
Studentka2010 [4]

Answer:

The correct answer is letter "C": Ability of a firm to pay the interest on its debt.

Explanation:

The cash coverage ratio is a metric that measures a company's ability to pay its financial obligations. Generally, the higher the coverage ratio the better for the business to meet its debt obligations. It is best to compare coverage ratios of companies in the same industry or sector in the economy. Comparisons across industries are not useful as companies in different industries use debt in different ways.

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3 years ago
b. D Corp stock currently trades at $50. August call options on the stock with a strike price of $55 are priced at $5.75. Octobe
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Answer:

The value of the time premium between the August and October options is $0.50

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A time premium or time value is the amount by which the price of a stock option exceeds its intrinsic value.

To calculate the time premium between August and October we will Subtract October extrinsic value - August extrinsic value

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3 0
3 years ago
Wyatt Oil is contemplating issuing a 20-year bond with semiannual coupons, a coupon rate of 7%, and a face value of $1000. Wyatt
enyata [817]

Complete question:

Security Term (years) Yield (%)

Treasury 2 0 5.5%

AAA Corporate 2 0 7.0%

BBB Corporate 20 8.0%

B Corporate 2 0 9.6%

Wyatt Oil is contemplating issuing a 20-year bond with semiannual coupons, a coupon rate of  7%, and a face value of $1000. Wyatt Oil believes it can get a BBB rating from Standard and  Poor's for this bond issue. If Wyatt Oil is successful in getting a BBB rating, then the issue price  for these bonds would be closest to:

A) $891 B) $901 C) $1,000 D) $800

Answer:

If Wyatt Oil is successful in getting a BBB rating, then the issue price  for these bonds would be closest to:  $901

Solution:

Given,

FV = 1000,

N = 40,

I = 4,

PMT = 35

Compute PV ,

PV = FV \frac{1}{( 1+r)^{n} }

PV = 901.04

If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to: $901

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3 years ago
Read the excerpts about climate change. Article 1, found on the website of the Natural Resources Defense Council, a certified ch
Drupady [299]
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