Suppose the real risk-free rate is 3.25%, the average future inflation rate is 4.35%, and a maturity risk premium of 0.07% per year to maturity applies to both corporate and T-bonds, i.e., MRP = 0.07%(t), where t is the number of years to maturity. Suppose also that a liquidity premium of 0.50% and a default risk premium of 2.40% apply to A-rated corporate bonds but not to T-bonds. How much higher would the rate of return be on a 10-year A-rated corporate bond than on a 5-year Treasury bond? Here we assume that the pure expectations theory is NOT valid. Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average.
A. 3.48
B. 3.90
C. 3.25
D. 3.74
E. 3.84?
Answer: C
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A) It is declining in importance around the world because it is increasingly being replaced by private corporations. B) Its stock is generally traded on the securities exchanges of several nations. C) It restricts its production to a single nation but maintains worldwide distribution sites. D) Its managers should be citizens of the same country in which its corporate headquarters is located.
A customer contact center is responsible for?
a. Integrating all methods that a customer can use to contact a business b. Reaching out to customers by telephone c. Administering customer satisfaction surveys d. Responding to customer complaints
The difference between actual overhead costs incurred and the budgeted overhead costs based on a flexible budget is the:
A. Production variance. B. Controllable variance. C. Quantity variance. D. Volume variance. E. Price variance.
The finance function is relatively independent of most other corporate functions. Marketing decisions, for example, might affect the firm's need for funds but are not affected by conditions in financial markets or other financing issues.
Answer the following statement true (T) or false (F)