1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
AlladinOne [14]
3 years ago
5

Determinants of Interest Rate for Individual Securities The Wall Street Journal reports that the rate on 3-year Treasury securit

ies is 8.30 percent, and the 6-year Treasury rate is 8.45 percent. From discussions with your broker, you have determined that expected inflation premium is 3.70 percent next year, 3.95 percent in Year 2, and 4.15 percent in Year 3 and beyond. Further, you expect that real interest rates will be 4.10 percent annually for the foreseeable future. What is the maturity risk premium on the 6-year Treasury security
Business
1 answer:
egoroff_w [7]3 years ago
8 0

Answer:

20%

Explanation:

Calculation for What is the maturity risk premium on the 6-year Treasury security

Maturity risk premium=

8.45% = 4.15% + 4.10% + MP

MP = 8.45% − (4.15% + 4.10%)

MP=8.45%-8.25%

MP=0.20*100

MP=20%

Therefore the maturity risk premium on the 6-year Treasury security will be 20%

You might be interested in
Consider a one-year project that costs $126,000, provides an income of $70,000 a year for 5 years, and costs $225,000 to dispose
Inessa [10]

Answer:

Present Value (PV) of cash flows are as follows.

(i) Discount rate = 0%

\mathrm{PV}(\mathrm{S})=-126,000+70,000 \mathrm{x} \mathrm{P} / \mathrm{A}(0 \%, 5)-225,000 \mathrm{x} \mathrm{P} / \mathrm{F}(0 \%, 5)=-126,000+70,000 \times 5-225,000

= - 1

Since PV < 0, the project should not be undertaken.

(ii) Discount rate = 2%

\mathrm{PV}(\mathrm{S})=-126,000+70,000 \mathrm{x} \mathrm{P} / \mathrm{A}(2 \%, 5)-225,000 \mathrm{x} \mathrm{P} / \mathrm{F}(2 \%, 5)

|=-126,000+70,000 \times 4.7135-225,000 \times 0.9057

= 156

Since PV > 0, the project should be undertaken.

(iii) Discount rate = 5%

\mathrm{PV}(\mathrm{S})=-126,000+70,000 \mathrm{x} \mathrm{P} / \mathrm{A}(5 \%, 5)-225,000 \mathrm{x} \mathrm{P} / \mathrm{F}(5 \%, 5)

=-126,000+70,000 \times 4.3295-225,000 \times 0.7835

= 772

Since PV > 0, the project should be undertaken.

(ii) Discount rate = 10%

\mathrm{PV}(\mathrm{S})=-126,000+70,000 \mathrm{x} \mathrm{P} / \mathrm{A}(10 \%, 5)-225,000 \mathrm{x} \mathrm{P} / \mathrm{F}(10 \%, 5)

=-126,000+70,000 \times 3.7908-225,000 \times 0.6209=-126,000+265,356-139,707

= - 351

Since PV < 0, the project should not be undertaken.

4 0
3 years ago
Question 3 Resonant leaders create relationships in which those involved experience the following conditions. (Select the answer
cupoosta [38]

The exception to how a Resonant leaders create relationships in which those involved experience as the following conditions is Creation of Fear.

<h3>Who is a Resonant leaders?</h3>

Basically, the Resonance refers to the act of reinforcing sound by moving on the same wavelength. A resonant leaders means the leader that drive an emotions positive and bringing out the best in the follower.

For instance, when two people are on the same wavelength emotionally; the more resonant people are with each other, the less static are their interactions and resonance minimizes the noise in the system

Hence, a Resonant leaders brings Hope, purpose or vision Mindfulness Compassion and Playfulness.

Therefore, the Option D is correct.

Missing options "Hope, purpose or vision Mindfulness Compassion Playfulness Fear"

Read more about Resonant leaders

brainly.in/question/8750521

#SPJ1

6 0
1 year ago
The country of Growpaw does not trade with any other country. Its GDP is $20 billion. Its government purchases $3 billion worth
Anna [14]

Answer:

option a) 5 billion

Explanation:

Data provided in the question:

GDP = $20 billion

Cost of goods and services = $3 billion

Tax collected = $6 billion

Transfer payments to households = $2 billion

Private saving in Growpaw = $4 billion

Now,

Disposable income = GDP - taxes + transfer payments

=$20 billion - $6 billion + $2 billion

= $16 billion

Consumption = Disposable income - Savings

= $16 billion - $4 billion

= $12 billion

Thus,

Investment = GDP - consumption - government purchases

= $20 billion - $12 billion - $3 billion

= $5 billion

Hence,

the correct answer is option a) 5 billion

8 0
3 years ago
Regardless of whether a tax is levied on sellers or buyers, taxes encourage market activity.
jeyben [28]
The answer is true because activity is important and shouldn't be discouraged.
5 0
3 years ago
FreeSpirit is a global consumer products company. It manufactures a number of new products ranging from personal care to food an
Paul [167]

Answer:  Prospector

                   

Explanation: In simple words, a prospector refers to an individual  or an entity that keeps exploring its environment for some personal goal. Usually these entities keeps continuous researching for innovation so that new products and practices could be developed.

In the given case, Free spirit keeps searching for new product development

and uses different platform for their promotional purposes.

Hence from the above we can conclude that it free spirit is a prospector.

3 0
3 years ago
Other questions:
  • True or false: in restaurants, tipping is not customary because it violates the tradition of tahitian hospitality.
    6·2 answers
  • Problem 2-16 Balance Sheet (LG2-1) Glen’s Tobacco Shop has total assets of $96.4 million. Fifty percent of these assets are fina
    10·1 answer
  • What type of investment offers both capital gains and interest income?
    10·1 answer
  • A "specific" factor of production is: A) critical to the production of the good or service B) not transferable to other types of
    7·1 answer
  • If you’re tired of managing a large number of work utilities to perform specialized tasks outside the office, it might be worth
    12·2 answers
  • If the market for sport utility vehicles has excess supply, then one can say that: A. supply is greater than demand. B. quantity
    13·1 answer
  • Melissa invested her savings in two investment funds. The amount she invested in Fund A was $6000 less than the amount she inves
    11·1 answer
  • Assume that a profit-maximizing firm which competes in a purely competitive product industry has only two factor inputs, labor a
    10·1 answer
  • An investor is considering an investment that will pay $2,150 at the end of each year for the next 10 years. He expects to earn
    15·1 answer
  • Allen is preparing a pie chart for the Empty Stocking Fund to show the proportionate low spending on administrative overhead as
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!