What is the real risk-free rate

Assignment Help Finance Basics
Reference no: EM132775999

5-year Treasury bonds yield 6.2%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free rate, r*?

Reference no: EM132775999

Questions Cloud

What is the present value of the payments : The interest rate is 5% now and increases to 6% in the next year. What is the present value of the payments?
Current market value of the firm debt : The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt?
Expanded and improved commercial possibilities : What expanded and improved commercial possibilities by the late 2000s?
What is the bond price : Haswell Enterprises' bonds have a 10-year maturity, a 6.25% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 8%, based on semiannua
What is the real risk-free rate : 5-year Treasury bonds yield 6.2%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free ra
What is the current stock price : A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 19.5%, and the constant growth rate is g = 4.0%. What is the current stock price
What is the stock''s expected price 3 years from today : The required rate of return on the stock, rs, is 9.00%. What is the stock's expected price 3 years from today?
What is the expected exchange rate next year : What is the expected exchange rate next year? Answer the exchange rate with two decimal points.
Evaluating web based analytics platforms : Applications and describe their functionality and why you chose them. Discuss your choice in class with your lecturer and other students.

Reviews

Write a Review

Finance Basics Questions & Answers

  Hypotheses for the difference in two population means

Your manager, who just read an abridged version of a statistics book, wants you to test hypotheses for the difference in two population means. The sample sizes for each are 23. He is adamant that you perform a z-test. What would you tell him? What..

  Use the dupont system to calculate the return on assets

Diagram the expanded DuPont system for Hunter for 2012. Insert the appropriate dollar amounts wherever possible.

  Quality is a subset of customer satisfaction

1. What are the costs associates with quality? How does quality relate to the purchasing function? 2. Quality is a subset of customer satisfaction. What is meant by this statement? What is the definition of value?

  Find the equivalent annual cost of equipment

Bridgton Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $102,000, has a 5 year life, and costs $9,400 per year.

  What is the profitability index

ABC is reviewing a project that will cost $2,081.The project will produce cash flows $594 at the end of each year for the first two years and $784 at the end of each year for the next three years. What is the profitability index? Assume interest rate..

  How to calculate the contract price in case

Assume now that the trade went in the opposite direction (it goes down) for that specified in part c (the contract closed at $2700).

  What are your HPR

At what price do you receive a margin call assuming a 30% minimum margin requirement? What are your HPR if the price goes to $23.50

  What is the purpose of means comparisons

What is the purpose of means comparisons, and what different types of means comparisons are there? What do they tell the researcher that the significance test for F cannot?

  Financial data for noble corporation

Assume the following financial data for Noble Corporation and Barnes Enterprises:

  Calculate the conversion price

Calculate the conversion price for each of the following convertible bonds: a. A $1,000-par-value bond that is convertible into 20 shares of common stock. b. A $500-par-value bond that is convertible into 25 shares of common stock

  Standard deviations of numbers

There are three stocks to invest in: A, B and C. In one year the expected increases in price are: 10% for stock A, 15% for Stock B, and 5% for stock C. The standard deviations of these numbers are 2% for A and B and 1% for C.

  Tracked the averages of? stocks

Suppose a man invested ?$200 at the end of 1900 in each of three funds that tracked the averages of? stocks, bonds, and? cash, respectively.

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