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Musya8 [376]
3 years ago
10

Assuming that the term structure of interest rates is determined as posited by the pure expectations theory, which of the follow

ing statements is CORRECT? a. Inflation is expected to be zero. b. Consumer prices as measured by an index of inflation are expected to rise at a constant rate. c. The maturity risk premium is assumed to be zero. d. In equilibrium, long-term rates must be equal to short-term rates. e. An upward-sloping yield curve implies that future short-term rates are expected to decline.
Business
1 answer:
Sidana [21]3 years ago
8 0

Answer:

c. The maturity risk premium is assumed to be zero.

Explanation:

In the case when the term structure of the rate of interest would be measured via the pure expectations theory so here the maturity risk premium would be zero as under this theory it is assumed that the risk premium i.e. of the long term would be equivalent to the zero

Therefore the option c is correct

And, the rest of the options seems wrong

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Yes Yes I do what grade though? and type

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Identify and explain each of the situational influences that are described in this scenario: Which situational influence was not
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Answer:

Physical surroundings.

Explanation:

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3 years ago
What is the term for the total amount of money produced by the sale of goods and services?
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Answer:

D) revenue

Explanation:

Revenue is the total amount of income generated by the sale of goods or services related to the company's primary operations.

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4 0
2 years ago
Suppose your company needs $16 million to build a new assembly line. Your target debt−equity ratio is .7. The flotation cost for
kumpel [21]

Answer:

7.76%

Explanation:

The computation of the weighted average flotation cost is shown below:

= Weightage of equity × flotation cost for new equity +  Weightage of debt × flotation cost for debt

Since the debt-equity ratio is 0.7 which means the debt value is 7 and the equity value is 10 so the total firm would be 1.70

So, Weighted of debt = (0.7 ÷ 1.70) =0.411

And, the weighted of common stock = (Common stock ÷ total firm)

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                                                              = 0.588    

Now put these values to the above formula  

So, the value would equal to

= (0.588 × 9%) + (0.411 × 6%)

= 0.05292% + 0.02466%

= 7.76%

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3 years ago
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