Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 2.00% per year. What is the real risk-free rate of return, r*

Answers

Answer 1

Answer:

Real risk-free rate of return = 5.00%

Explanation:

r* = T-Bill yield - IP

Real risk-free rate of return = T-bills currently yield - Inflation rate

Real risk-free rate of return = 7.00% - 2.00%

Real risk-free rate of return = 5.00%


Related Questions

Hal is enrolled for one class at a local community college; tuition cost him $190. Hal's AGI is $20,000. Before considering a limitation due to tax liability, Hal can take a lifetime learning credit of:

Answers

Answer:

the lifetime learning credit is $38

Explanation:

The computation of the lifetime learning credit is shown below:

= 20% of tuition cost

= 20% of $190

= $38

Hence, the lifetime learning credit is $38

We simply applied the above formula so that the correct value could come

And, the same is to be considered

he is eligible for 20% only so the same is relevant

using to data in this chart, write an essay comparing the number of each business type to their sales and profitability?

Answers

Answer:liability is affected by the type of business owned. ... numerous and profitable of all business organiza- ... 16.7%. Number of Organizations. Sales. Net Income (profit). Corporations ... an update of the data. ... Making Comparisons If a corporation ... Using Charts This organizational chart shows the chain of command of a ...

Explanation:

The type of business owned by the most prevalent and successful of all business organizations affect liability. Organizational size. Sales. Net Profit (profit). Businesses. an update of the data. Establishing contrasts If an organization. Using Diagrams The chain of command for a company is depicted in this organizational chart.

What is the organization?

A company, institution, association, or another type of entity made up of one or more people serving a specific purpose is referred to as an organization or organization. The word is derived from the Greek word organon, which also refers to an organ and various tools or instruments.

The sole proprietorship, partnership, corporation, and S corporation are the four most popular business structures. A Limited Liability Company (LLC) is a type of corporate entity that is permitted under state law.

Therefore,  Organizational size is. Sales. Net Profit (profit). Businesses. an update of the data. Establishing contrasts

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The interest yields on U.S. Treasury securities in early 2009 fell to very low levels as a result of the combined events surrounding the global financial crisis. Calculate the simple and annualized yields for the​ 3-month and​ 6-month Tresury bills auctioned on March​ 9, 2009, listed here.

3-Months T-bills 6- Months T- bills
Treasury bill, face value $10,000 $10,000
Price at sale 9993.93 9976.74
Discount 6.07 23.07

Answers

Answer and Explanation:

The computation is shown below:

For three months

Simple yield is

= Discount ÷ Price at sale

= 6.07 ÷ 9993.93

= 0.0607%

And, the annualized yield is

= 0.0607% ÷ 3 × 12

= 0.2428%

For 6 months

= Discount ÷ Price at sale

= 23.07 ÷ 9976.74

= 0.2312%

And, the annualized yield is

= 0.2312% ÷ 6 × 12

= 0.4625%

How can formal business documents help managers solve problems? A. By presenting well-organized, accurate information about a problem O B. By eliminating the need for schedules and budgets to track progress C. By making decisions so the managers do not have to handle them O D. By creating a record of every action taken during a meeting ​

Answers

Answer:

the answer is A

Explanation:

If You-Will-Never-Pay-It-Off Loan Company lends you $50 on Monday, and you have to pay $60 after a week, what nominal rate of interest (APR) are they charging

Answers

Answer:

the annual percentage rate is 1040%

Explanation:

The computation of the nominal rate of interest is shown below:

As we know that

Future value = Present value × (1 + rate of interest)^number of years  

$60 = $50 × (1 + rate of interest)^1

1 + rate of interest = ($60 ÷ $50)

rate of interest is

= (1.2- 1 ) × 100

= 20%

Now the annual percentage rate is

= 20% × 52

= 1040%

hence, the annual percentage rate is 1040%

Which approach is a positive way to deal with conflicts?

Answers

Answer:

trying to evaluate the situation from all diff perspectives

Consider the CAPM. The risk-free rate is 5%, and the expected return on the market is 15%. What is the beta on a stock with an expected return of 17%

Answers

Answer:

im sorry

Explanation:

A sample of 40 individuals at a shopping mall found that the mean number of visits to a restaurant per week was 2.88 with a standard deviation of 1.59. Find a 99% confidence interval for the mean num-ber of restaurant visits. Use the appropriate formula and verify your result using the Confidence Intervals workbook.

Answers

Answer:

The confidence interval is between 2.23 and 3.53

Explanation:

The confidence interval (C) = 99% = 0.99

α = 1 - C = 1 - 0.99 = 0.01

α/2 = 0.01/2 = 0.005

The z score of α/2 corresponds to the z score of 0.495 (0.5 - 0.005) which is 2.576

The margin of error (E) is given as:

[tex]E=z_{\frac{\alpha}{2} }*\frac{\sigma}{\sqrt{n} }\\\\where\ n=sample\ size,\sigma=standard\ deviation\\\\Given\ that\ \sigma=1.59,n=40,z_{\frac{\alpha}{2} }=2.576\ hence: \\\\E=2.576*\frac{1.59}{\sqrt{40} } =0.65[/tex]

The confidence interval = mean ± margin of error = 2.88 ± 0.65 = (2.23, 3.53)

The confidence interval is between 2.23 and 3.53

The threat of lawsuits has caused some drug companies not to manufacture certain types of vaccines. What type of risk management option is being practiced?

Answers

Answer:

C) Avoiding the risk

type of risk management option is being practiced.

Explanation:

Risk management is the method of recognizing, evaluating, and managing threats to an organization's resources and incomes. These signals, or uncertainties, could originate from a wide category of causes, including financial contingency, legal responsibilities, strategic administration mistakes, disasters, and natural disasters.

Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow:
Total Luxury Sporty
Sales revenue $510,000 $380,000 $130.000
Variable expenses 365.000 245,000 120.000
Contribution margin 145.000 135,000 10.000
Fixed expenses 80 000 40,000 40,000
Operating income (loss) $65.000 $95.000 $(130,000)
Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Sporty line is used to increase the production of Luxury watches by 250%, how will operating income be affected?
A. Increase $257,500.
B. Increase $337,500.
C. Increase $192,500.
D. Decrease $192,500.
J&A Corporation has a monthly target operating income of $35,700. Variable expenses are 30% of sales and monthly fixed expenses are $13,300. What is the monthly margin of safety as a percentage of target sales in dollars?
A. 26.84%.
B. 72.86%.
C. 13.73%.
D. 70%.

Answers

Answer:

A. Operating income will increase by $257,500

Explanation:

Given the following,

Sales revenue

Total  = $130,000

Luxury = $510,000

Sporty = $380,000

Variable expense

Total = $120,000

Luxury = $365,000

Sporty = $245,000

Contribution margin

Total = $10,000

Luxury = $145,000

Sporty = $135,000

New income statement

Sales  

$510,000

Less : Variable costs

($365,000)

Contribution margin

$145,000

Fixed cost

($40,000 + $40,000)

($80,000)

Operating income

$65,000

If a portfolio of the two assets has an expected return of 7 percent, what is its beta? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)

Answers

Answer:

the beta of the portfolio is 0.562

Explanation:

The computation of the beta is shown below:

As we know that

Expected return of portfolio = return of stock × weightage of stock + return of risk free asset × weightage of risk free asset

7% = 11% × weightage of stock + 2.4% × (1 - weightage of stock)

weightage of stock = 0.535

Now Beta of portfolio is

= 1.05 × 0.535

= 0.562

hence, the beta of the portfolio is 0.562

If a landowner purchased a vacant lot six years ago for $25,000, assuming no income or holding costs during the interim period, what price would the landowner need to receive today to yield a 10% annual return on the land investment?
a. $40,262.75.
b. $41,132.72.
c. $44,289.03.
d. $64,843.563.

Answers

Answer:

c. $44,289.03

Explanation:

Given that: present value = $25000, rate = 10%, n = 6 years. Then the future value can be determined by:

FV = PV[tex](1+r)^{n}[/tex]

where: FV is the future value, PV is the present value, r is the rate and n is the number of years.

So that:

FV = 25000[tex](1 + 0.1)^{6}[/tex]

    = 25000[tex](1.1)^{6}[/tex]

    = 25000 x 1.771561

    = 44289.025

FV = 44289.03

The price that the landowner would receive today is $44,289.03.

Kitchel told Parker that he needed a couple of weeks to think about his proposal. How should Parker handle this

Answers

Answer: Parker should close the deal quickly

Explanation:

Giving Kitchel so much time to go over the proposal is not ideal because in that time events could happen that would ensure Kitchel stayed with their current supplier such as the current supplier finding out and offering better terms thereby enticing Kitchel to stay.

It is imperative therefore that Parker close the deal as quickly as possible. He can do this by offering time conscious incentives that require that Kitchel order fast, he could even go meet Kitchel in person and press his claim and even hit hard at the weakness of Richmond's current supplier by stating that he would deliver things ahead of schedule.

Marcie goes to the salon and has a pedicure and a manicure. What has Marcie purchased from the salon?
A.) A good
B.) A good and a service
C.) Neither
D.) A service

Answers

Answer:

D.) A service
A service because she hasn’t purchased a physical item

When Patricia sells her Apple stock at the same time that Brian purchases the same amount of Apple stock, Apple receives:_____________.
a. nothing.
b. only the market value of the common stock.
c. the dollar value of the transaction.
d. the dollar amount of the transaction, less brokerage fees.

Answers

Answer:

When Patricia sells her Apple stock at the same time that Brian purchases the same amount of Apple stock, Apple receives:_____________.

a. nothing.

Explanation:

The activities of investors on the Stock Exchange market do not affect the corporation, whose stocks are being traded.  The corporation does not get any money nor does it incur any cost.  Patricia may get a capital gain from the sale and not the corporation.  When Brian purchases Apple stock it is purchased from another investor and not directly from the corporation unless it is an initial public offer.

How does globalization affect competition?
It increases competition.
It doesn't affect competition.
It supports the local culture.
lt decreases competition.

Answers

Answer: it increases competition

Explanation:

Just took a test with that question

It increases competition does globalization affect competition. Hence, option A is correct.

What is globalization?

The process of greater connectedness and interdependence due to trade and technology is referred to as "globalization." The ensuing societal and economic changes are also covered by the definition of globalization.

Globalization is the acceleration of international exchanges and movements of people, things, and services, money, technologies, or cultural norms. One of the effects of globalization is to promote and encourage relationships between different communities and places around the world.

Free trade agreements like the Trans-Pacific Partnership and the North American Free Trade Agreement serve as prime examples of economic globalization.

Thus, option A is correct.

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Under the provisions of the Investment Advisers Act of 1940, if an adviser takes custody of customer funds or securities, account statements MUST be sent to the customer:

Answers

Answer:

Quarterly

Explanation:

According to the provisions of the Investment Advisers Act of 1940, in the case when an advisor takes the customer custody in term of funds or securities so the account statement must be sent to the customer on the a quarterly basis i.e. four times in a year. Here four times means every three months

therefore as per the given situation, the quarterly is the answer

Companies seeking good PR may host a(n) _____ to highlight new hires, new facilities, or community service projects. Group of answer choices

Answers

Answer:

press conference

Explanation:

press conference which is an interview by journalist to a company or particular personel bto answer some questions on some of their products is essential in business.

It should be noted that Companies seeking good PR may host a press conference to highlight new hires, new facilities, or community service projects.

56 Points & BRAINLIEST Which of the following can be created between two tables which share a common field?
O Field report
O Relationship
O Datasheet
O Connections

Answers

i think the third option but i think its wrong i am unsure and i dont want to say thhe wrong thing

Huron has provided the following year-end balances:Cash, $30,000Patents, $8,800Accounts receivable, $9,800Property, plant, and equipment, $99,800Prepaid insurance, $5,500Accumulated depreciation, $18,000Inventory, $33,000Retained earnings, 15,500Trademarks, $14,500Accounts payable, $8,000Goodwill, $11,000How much are Huron's net noncurrent assets?a) $107,300.b) $125,300.c) $121,600.d) $116,100.

Answers

Answer:

d) $116,100.

Explanation:

The computation of the net non current asset is shown below:

= Patents + Property, plant, and equipment - accumulated depreciation + trademarks + goodwill

= $8,800 + $99,800 - $18,000 + $14,500 + $11,000

= $116,100

The net non current asset is $116,100

We simply applied the above formula so that the correct value could come

And, the same is to be considered

Hence, the correct option is d. $116,100

Rouge Company’s $250,000 net income for the quarter ended September 30 included the following after-tax items:A $20,000 cumulative effect loss resulting from a change in inventory valuation method made on September 1.$0 of the $60,000 annual property taxes paid on February 1.For the quarter ended September 30, the amount of net income that Rouge should report is:_______.a. $235,000.b. $250,000.c. $255,000.d. $270,000.

Answers

Answer:

c. $255,000

Explanation:

Rouge should report the following income for this quarter = $250,000 (net income) + $20,000 (cumulative effect loss) - $15,000 (25% of annual property taxes) = $255,000

Cumulative effects on inventory valuation occur when overstate or understate your inventory levels, which directly affects cost of goods sold and overall profits.

Bayer Company uses the periodic inventory system. Bayer Company sold goods on account with a retail price of $800 and a cost of $500. What journal entries are prepared?
A. debit Accounts Receivable for $ 500 and credit Sales Revenue for $ 500 .
B. debit Inventory for $ 500 and credit Purchases for $ 500 .
C. debit Accounts Receivable for $ 800 and credit Sales Revenue for $ 800 ​, debit Cost of Goods Sold for $ 500 and credit Inventory for $ 500 .
D. debit Accounts Receivable for $ 800 and credit Sales Revenue for $ 800 .

Answers

Answer:

c.

Explanation:

A decrease in taxes will shift aggregate demand to the _____, cause consumption to _____, and cause output to _____. Due to the crowding-out effect, investment will _____.

Answers

Answer:

right, increase, increase, decrease

Explanation:

In simple words, a decrease in taxes will result in more disposable income to the individuals which will further lead to increase in demand. Increase in demand will shift the overall economy curve to grow leading to increase in output and consumption.

As per the crowding out effect, the decrease in taxes will increase demand and spending leading to inflation which causes money to value less. Hence individuals will mostly consume their income and will invest less.

05. In identifying risks to then manage and control, as the portfolio
manager you are consulting organizational process assets such as:​

Answers

Introduction
“Project risk analysis,” as described by The Project Management Institute (PMI®), “includes the processes concerned with conducting risk management, planning, identification analysis, response, and monitoring and control on a project;./…” (PMI, 2004, p 237) These processes include risk identification and quantification, risk response development and risk response control.

Because these processes interact with each other as well as with processes in other parts of an organization, companies are beginning to measure risk across all of their projects as part of an enterprise portfolio.

Risk management can be as simple as identifying a list of technological, operational and business risks, or as comprehensive as in-depth schedule risk analysis using Monte Carlo simulation. But because risk is a driver in an organization's growth – the greater the risk, the greater the reward – the adoption of a structured enterprisewide project risk analysis program will give managers confidence in their decision-making to foster organizational growth and increase ROI for their stakeholders.

Choosing the right projects

How well an organization examines the risks associated with its initiatives, how well it understands the way that projects planned or underway are impacted by risk, and how well it develops mitigation strategies to protect the organization, can mean the difference between a crisis and an opportunity.

Examples abound of companies that have seen their fortunes rise or drop based on the effectiveness of their risk management – a pharmaceutical company makes headlines when its promising new drug brings unforeseen side effects. Or a large telecom corporation pours millions of dollars into perfecting long distance, while new technologies are presenting more exciting opportunities.

Today that pharmaceutical is distracted by lawsuits and financial payouts, finding itself with a shrinking pipeline of new drugs. The telecom, on the other hand, after using a portfolio risk management software application to rationalize and rank its initiatives, made the decision to shift its research dollars away from perfecting long distance and into developing VOIP -- rejuvenating and reinforcing its leadership position.

AJAX Inc. has subsidiaries in Vietnam, Bangladesh, and China. AJAX pays an annual insurance premium to OPIC (the Overseas Private Investment Corporation). AJAX is probably protecting itself from _____.
a. natural disasters overseas.
b. financial instability.
c. unfair competition.
d. nationalization.

Answers

Answer:

The correct answer is the option B: Financial instability.

Explanation:

To begin with, the "Overseas Private Investment Corporation" or OPIC was the name given to a financial institution of the United States Government who main purpose was to help solve problems according to financial matters of companies who were going abroad to establish work and capital. Therefore that this institution was created with the objective of impulsing the United States' foreign policies. That is why that if AJAX pays an annual insurance premium to OPIC is because its trying to protect itself from financial instability that could bring the fact of going overseas to work, which in case that happens the OPIC will help them to resolve that situation

On January 10, 2017, a man in Lebanon, Virginia, frustrated with the DMV bureaucracy, paid his DMV bill with 300,000 pennies that he carted into the DMV office in five wheelbarrows. The DMV had to count all these pennies and deposit them into the DMV bank account. After the DMV deposit and assuming a reserve requirement of 7 percent, calculate the initial change in

Answers

Answer:

the requirements are missing, so I looked for them:

a. Money supply. b. Deposits. c. Total reserves. d. Excess reserves.

a. $0

the coins are part of M1 money supply already, so it will not change it.

b. $3,000.

the DMV should deposit the pennies in their account account, therefore, total bank deposits will increase by 300,000¢ /100 = $3,000

c. $3,000

since bank deposits increase by $3,000, total reserves also increase by $3,000

d. $2,790

excess reserves = total reserves - required reserve ratio = $3,000 - ($3,000 x 7%) = $2,790

QUESTION 22 In a competitive market, A. no single buyer or seller can influence the price of the product. B. there are only a small number of sellers. C. the goods offered by the different sellers are unique. D. accounting profit is driven to zero as firms freely enter and exit the market.

Answers

Answer:

A

Explanation:

In a competitive market there are no single buyer or seller that can influence the price of the product.

Such a market has numerous producers who compete with each other to provide goods and services. Not one producer can influence the market prices by increasing his output or by decreasing it.

Same goes for the consumer. One consumer can not influence the prices either.

You purchase a $325,000 town home and you pay 25% down. You obtain a 30-year fixed-rate mortgage with an annual interest rate of 5.75%. After 5 years you refinance the mortgage for 25 years at a 5.1% annual interest rate. After you refinance, what is the new monthly payment (to the nearest dollar)?
A. $1,422
B. $1,401
C. $1,366
D. $1,335
E. $1,296

Answers

Answer:

Option D ($1335) is the right answer.

Explanation:

Step 1:

[tex]PV=325000\times (1-25 \ percent)\\[/tex]

[tex]N=30\times 12\\[/tex]

[tex]\frac{I}{Y} =\frac{5.75 \ percent}{12} \\[/tex]

[tex]FV=0\\[/tex]

[tex]CPT \ PMT=$1,422.46\\[/tex]

Step 2:

[tex]PMT=1422.46[/tex]

[tex]PV=-325000\timse (1-25 \ percent)[/tex]

[tex]\frac{I}{Y} =\frac{5.75 \ percent}{12}[/tex]

[tex]N=12\times 5[/tex]

[tex]CPT \ FV=$226,107.75[/tex]

Step 3:

[tex]PV=-226107.75[/tex]

[tex]\frac{I}{Y} =\frac{5.1 \ percent}{12}[/tex]

[tex]N=12\times 25[/tex]

[tex]FV=0[/tex]

[tex]CPT \ PMT=$1,335.01[/tex]

The other options offered aren't really relevant to the scenario presented. So, the solution here is just the right one.

$10,000 of profit from a sole proprietorship in 2020. If he also has $140,000 of salary income, how much self-employment tax will he owe

Answers

Answer:

268 dollars

Explanation:

Profit made by this sole proprietor = 10000

Salary income = 140000

The question needs us to calculate the self employment tax that he owes

This tax is about 2.9% of 92.35% of his income. His salary is already more than social security maximum of 128,700.

The, self-employment tax would be = 10,000 x 92.35% x 2.9%

= 267.815

When approximated

= $268

The year-end financial statements of Rally Company for the current year, report total revenues of $19,829 million, accounts receivable of $1,272 million at the current year-end, and $1,19 million for the prior year-end. The company's accounts receivable turnover for the year is:_______.
a. 18.3 times.
b. 18.9 times.
c. 19.5 times.
d. 20.0 times.
e. none of these are correct.

Answers

Answer:

16.1 times

Explanation:

Calculation for the company's accounts receivable turnover for the year

Using this formula

Accounts Recievable Turnover = Total Revenues/Average accounts receivables

Let plug in the formula

Accounts Receivable Turnover = $19,829/[($1,272+$1,198)/2]

Accounts Receivable Turnover =$19,829/$1,235

Accounts Receivable Turnover = 16.1 times

Therefore The company's accounts receivable turnover for the year is: 16.1 times

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