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Differentiate between nominal and real interest rate

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Please Answer the following question :

1. Differentiate between nominal and real interest rate. What is the relationship between real interest rate and Purchasing power parity?

2. Yield to maturity is just like an IRR. Comment on statement. Why the lower rated corporate securities have a higher risk premium than that of higher rate corporate securities?

3. Yield to maturity is just like an IRR. Comment on statement. Why the lower rated corporate securities have a higher risk premium than that of higher rate corporate securities?

4. Why the cost of debt is less than the cost of a common stock? Discuss the Role of CAPM in Calculation of WACC and where we use the concept of WACC?

Reference no: EM132753224

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