You read in The Wall Street Journal that 30-day T-bills are currently yielding 8 percent. Your brother-in-law, a broker at Kyoto Securities, has given you the following estimates of current interest rate premiums:?
?
Inflation premium 5%
Liquidity premium 1%
Maturity risk premium 2%
Default risk premium 2%
Based on these data, the real risk-free rate of return is:
?
A. ?0%.
B. ?1%.
C. ?2%.
D. ?3%.
E. ?4%.
Answer: D
You might also like to view...
Most states prohibit corporations from paying a dividend if a deficit will occur
Indicate whether the statement is true or false
Product specifications are best described as
A. necessary characteristics and level of quality. B. descriptions of a product. C. numbers of quality inspections required. D. comparisons to similar products. E. defective product return policies.
Expert Pavers, Inc., contracts with Fabricated Building Corporation to repave Fabricated's parking lot for which Fabricated agrees to pay. The elements of this, and any other, contract include
A. capability. B. consideration. C. formation. D. practicality.
The quantity values on the right-hand side of the primal inequality constraints are the ________ coefficients in the dual
Fill in the blank with correct word.