What is an appropriate three year interest

Assignment Help Finance Basics
Reference no: EM132506037

This is a question on a past exam paper for finance (financial markets institutions and money) i was wondering if i had done it correctly and what workings i would need to show to answer it.

1. a. A bank which is considering a fixed rate, three year loan to a customer requires a 2% per annum real return and makes the following inflation rate forecasts: Year 1: 1.5%

Year 2: 1.2%

Year 3: 2.0%

What is an appropriate three year interest rate for the loan

Reference no: EM132506037

Questions Cloud

Why should students be involved in establishing goals : Why should students be actively involved in establishing their educational goals? How can a teacher involve a student who may not be receptive to the goal.
What would it cost you in nzd to purchase a usd 2 million : What would it cost you in NZD to purchase a USD 2 million three-month forward contract
Write reflection based on the feedback you received : Write a 500-750-word reflection based on the feedback you received from your classroom teacher and personal observations about the experience.
Find the maximum net price for product : The Selling price has been set as $449, $499, and $425 for Products A, B and C respectively. ABC Company wishes to establish a net price (to retailers)
What is an appropriate three year interest : What is an appropriate three year interest rate for the loan
Prepare an adjusting journal entry to record the bad debt : Prepare an adjusting journal entry to record the bad debt expense for 2020. Robert has credit sales of $1 200 000 during 2020 and estimates at the end
Unit 20 Digital Principles Assignment : Unit 20 Digital Principles Assignment Help and Solution, Higher National Diploma in Engineering - Assessment Writing Service - Assignment - Digital Circuits
What questions or concerns do you have surrounding your work : Please share the tentative research design from your prospectus and provide a brief rationale for it. Also include the research question(s) and the associated.
Provide one example where information is relevant : Provide one example where information is relevant. Provide one example where information is not relevant but is faithfully represented.

Reviews

Write a Review

Finance Basics Questions & Answers

  Lily co is expected to pay a dividend of 525 on its common

lily co. is expected to pay a dividend of 5.25 on its common stock next year. the companys dividends are expected to

  What maximum growth rate can drazi achieve

The firm has no plan to raise funds externally, only counting on its own retained earnings to support growth. What maximum growth rate can Drazi achieve?

  Low risk investments comparable to the retirement

You currently earn 12% on low risk investments comparable to the retirement annuity. Ignoring taxes what is the most you will pay for this annuity?

  How come staff will have sufficient time to check vouchers

How come you said that you can finish the audit within 4 weeks? How come your staff will have sufficient time to check all the vouchers and statements for last year?

  What is barry''s total profit or loss if the value of the yen

Describe how Barry Egan could utilize these options to speculate on the movement of the Japanese yen. Assume Barry decides to construct a long strangle in yen. What are the break-even points of this strangle? What is Barry's total profit or loss if t..

  Discuss the dominant strategy

Your economics instructor is at it again. This time, you have to do a two-student project. Assume that you and your partner are both interested in maximizing.

  Find the operating breakeven point in number of cds

a) Find the operating breakeven point in number of CDs. b) Calculate the total operating costs at the breakeven volume found in part a.

  The profit margin on sales will be 7 percent what would

red barn dress shops inc. can open a new store that will do an annual sales volume of 960000. it will turn over its

  What is the value of the laser tag center

The cost of capital for the laser tag center is 5.58 percent. What is the value of the laser tag center?

  What capital budgeting model are we using

What capital budgeting model are we using, and what decision is recommended from that model?

  How would you use the cash flow analysis

Consider the following investment. A parcel of land is available for sale (today only) at $10,000. You expect (based on expert advice) to sell the land a year from now at $11,000. What is your return on investment (ROI)?

  Analyzing investments in expansions or other major projects

How is the concept of net present value used by hospitals in analyzing investments in expansions or other major projects?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd