The real risk-free rate of return

Assignment Help Financial Accounting

Reference no: EM131264084

You read in The Wall Street Journal that 30-day T-bills are currently yielding 5 percent. Your brother-in-law, a broker at Kyoto Securities, has given you the following estimates of current interest rate premiums: show work

Inflation premium = 3%.

Liquidity premium = 1%.

Maturity risk premium = 0.5%.

Default risk premium = 0.5%.

On the basis of these data, the real risk-free rate of return is

a. 0%

b. 1%

c. 2%

d. 3%

e. 4%

Reference no: EM131264084

Questions Cloud

Determine the two most critical financial ratios for you : Determine the two most critical financial ratios for you to monitor at your facility, and indicate how each of these ratios would help you assess the current performance of your facility. Provide support for your rationale.

Break-even sales and sales to realize income from operations : For the current year ended March 31, Benatar Company expects fixed costs of $1,250,000, a unit variable cost of $100, and a unit selling price of $140. Compute the anticipated break-even sales (units). Compute the sales (units) required to realize in..

Make a thermodynamic analysis of this process : The two streams at 1000 kPa would then be mixed. Determine the rates at which steam at each initial pressure must be supplied to provide enough steam at 1000 kPa so that upon condensation to saturated liquid heat in the amount of 300 kW is release..

Low cost retailers locate near low income customers : Should low-cost retailers be required to locate near low-income customers? Why or why not? - Write a brief paragraph on how the AMA Statement of Ethics relates to retailing locations.

The real risk-free rate of return : You read in The Wall Street Journal that 30-day T-bills are currently yielding 5 percent. Your brother-in-law, a broker at Kyoto Securities, has given you the following estimates of current interest rate premiums: On the basis of these data, the rea..

How has the organization contributed to the quality movement : The primary purpose and target audience of the organization. Outline any membership requirements and benefits. How has the organization contributed to the quality movement. Examine advantages and disadvantages of each organization.

What are the total liabilities and equity for the company : Below is an adjusted trial balance for a company. What are the total liabilities and equity for the company?

Calculate the displacements reactions and internal forces : Calculate the displacements, reactions and internal forces for the system shown. For the beams E = 200,000 MPa, I = 500x106 mm4, and A = 12x103 mm2. For the truss members A = 8x103 mm2

Design a simulink diagram that implements the solution : Write a MATLAB script and design a Simulink diagram that implements the solution to Problem 12.8 with different filter parameter values N, and discuss the set-point step responses obtained by considering the effect of measurement noise on the proc..

User Account

All Pages