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
Aneli [31]
3 years ago
15

1. Suppose two types of firms wish to borrow in the bond market. Firms of type A are in good financial health and are relatively

low risk. The appropriate premium over the risk-free rate of lending to these firms is 2%. Firms of type B are in poor financial health and are relatively high risk. The appropriate premium over the risk-free rate of lending to these firms is 6%. As an investor, you have no other information about these firms except that type A and type B firms exist in equal numbers. a. At what interest rate would you be willing to lend if the risk-free rate were 5%
Business
1 answer:
Olin [163]3 years ago
8 0

Answer:

Type A is 7%, type b is 11%

Explanation:

We have these two firm's as type a and type b

For type A

Interest would be = risk Free rate of 2% + risk free rate of 5% = 7%

For type B

= Risk free rate of 5% + risk free rate of 6% = 11%

I would use the average of this two 9% as interest but this is not going to work for type A because this interest rate is too high. People won't want to pay this much.

You might be interested in
When corn prices soared, hog farmers used less corn to feed their pigs. The hog farmers showed a decrease in their:
blsea [12.9K]
They bought less corn, so they showed a decrease in demand.
5 0
3 years ago
Which is not an example of a biometric check
Doss [256]
The answer is letter B.

An image of your house key is not an example of  of a biometric check.
7 0
3 years ago
Read 2 more answers
_____ is collected by outside organizations such as federal and state governments, trade associations, nonprofit organizations,
Zepler [3.9K]

Answer: External secondary data

Explanation:

External secondary data are data gathered and saved by someone or a body that is not part of one's organization. Sources of External secondary data includes published materials, computerised databases and syndicated services.

Note that how difficult or easier it will be getting a secondary data will depend on the methods used in storing and indexing it.

6 0
4 years ago
On January​ 1, 2018, the Prepaid Insurance account of​ Dogwood, Inc. had a beginning balance of $ 1,800. Three months of ins
miv72 [106K]

Answer:

B. False

Explanation:

Beginning balance

-Period of policy= expired 2 months

-Period of unexpired insurance = 1 month (Out of 3 month, Insurance premium for period "Jan 1 to Feb 28" is expired)

Amount in prepaid insurance insurance= $1800 * 1/3 = $600

Current balance

Period = "0" since period of coverage will start from 1 march

Period of unexpired insurance = 12

Amount in prepaid insurance = 4,100

Thus, Total amount in prepaid insurance for the beginning and Current period= $600 + $4,100 = $4,700

The amount in prepaid insurance is $4700, hence the balance as stipulated as Prepaid Insurance = $ 1,200 is false

6 0
4 years ago
Review Key Concepts
notsponge [240]

Explanation:

1. Because marketing of goods must comply with current marketing practices. Trends and consumer perceptions must be maintained. It is important.

This refers to the acquisition, distribution, and marketing of goods, services or trademarks, such as advertisement and market analysis, and the production of the products for customers or end-users.

2. An example of an economic good and an economic service :

Economic goods: cars, furniture, television, and clothing

Economic services: cooking a hamburger, cutting hair

3 0
3 years ago
Other questions:
  • Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are l
    6·1 answer
  • From the income statement Depreciation expense $500 Loss on sale of equipment 4,000 From the balance sheet Beginning Equipment 1
    10·1 answer
  • Which of the following week payment types require you to pay upfront
    6·1 answer
  • An investor owns a portfolio of large capitalization blue chip stocks, each of which happens to be in the Dow Jones Industrial A
    6·1 answer
  • ABC had a net income of $8,000, $5,000, $12,000, and $10,000 over the first four years of the company's existence. If the averag
    5·1 answer
  • Relationship between short and long run in Philips curve
    13·1 answer
  • After a significant economic recession, prices and investing activity in the stock market began trending consistently upward six
    13·1 answer
  • If you owned a trade secret, what methods would you employ to protect it?
    14·1 answer
  • ____________ reflects the degree to which a person finds fulfillment in their job. a. Job involvement b. Organizational commitme
    6·1 answer
  • The aggregate demand curve would shift to the right as a result of
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!