Answer:
C) equity strategic alliances.
Explanation:
100% correct
For most automobile manufacturers, the elasticity of supply over time REMAINS THE SAME.
Automobile manufacturing takes time, it may take an automobile company several months to years before it can switch from constructing one type of car to another type. Such a company will have relatively inelastic supply in the long run compared to other products whose production process can be easily changed.
Answer:
Determinants of Interest Rates The real risk-free rate is 4%. Inflation is expected to be 4% this year, 5% next year, and then 4.5% thereafter. The maturity risk premium is estimated to be 0.0006 × (t - 1), where t = number of years to maturity. What is the nominal interest rate on a 7-year Treasury security?
The nominal interest rate = 8.86%.
Explanation:
Average inflation premium = (4%+5%+4.5%+4.5%+4.5%+4.5%+4.5%)/7 = 31.5%/7 = 4.50%
Maturity risk premium for 7 year bond = 0.0006 * (7-1) = 0.36%
Nominal interest rate = real risk free rate + inflation premium + maturity risk premium = 4% + 4.50% + 0.36% = 8.86%.
Therefore, the nominal interest rate for the question given = 8.86%.
