Answer:
According to fisher equation
(1+nominal Interest rate)=(1+real interest rate)(1+inflation)
1) So 1.17=(1+R)(1.13)
1+R=1.17/1.13
R=1.035-1
R=0.0353
Real interest rate = 3.53 percent
2) (1+NIR)= 1.03*1.04
1+ NIR= 1.072
NIR= 0.072
Nominal interest rate = 7.2 percent
A lender prefers a higher real interest rate as he will earn more money on the amount he has lend if the real interest rate is higher.
A borrower will prefer a lower real interest rate as he will have to pay lower interest payments on an amount if the real interest rate is lower.
Explanation:
Answer:
$1,250
Explanation:
Given the following :
Amount of marginable stock customer wishes to buy = $7,500
Restricted margin account with $2500 of SMA
Since the account is a restricted margin account, that is (account has fallen below intial requirement). There must be a deposit of 50% in the regulation T account.
Hence, to purchase a marginable stock of $7,500;
50% of $7,500 should be deposited;
50/100 × 7,500 = $3750
Since there is $2500 of SMA in restricted margin account
Hence, the amount needed will be ;
($3,750 - $2,500) = $1,250
Answer:
Stock value today = $1.21
Explanation:
Current Dividend = D
= $1.13
After 5 years that is D
= $0.50
Since expected growth = 0
Therefore
P
= D / Ke = 0.5/18% = $2.77
Its present value will be 
= $1.21
Stock value today = $1.21
Answer:
False
Explanation:
Studies of mutual fund performance indicate that mutual funds that outperformed the market in one time period usually do not beat the market in the next time period.
