An investor sees the current twelve-month rate at 4% and expects the following future twelve-month rate for each of the subsequent years; 4.5%, 5.5% and 6.0%. If this investor views a four-year maturity at 5.65% as equal to four consecutive one-year securities, what is his/her risk premium?
Fill in the blank(s) with the appropriate word(s).
0.65%
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If the United States receives $200 billion of foreign investment and at the same time invests a total of $160 billion abroad, then the U.S
A) balance of payments must be negative. B) current account must be in surplus. C) official settlements account balance increases by $40 billion. D) capital and financial account balance decreases by $40 billion. E) capital and financial account balance increases by $40 billion.
Over the past decade, the demand for goods produced in China has brought a sustained increase in demand for China's exports that has out-stripped the growth of supply. As a result, China has experienced a _______
A. period of stable prices and sustained economic growth B. rising price level and demand-pull inflation C. rising price level and cost-push inflation D. rising price level and a falling real wage rate
If the market price is $25 in a perfectly competitive market, the marginal revenue from selling the fifth unit is
A) $5. B) $12.50. C) $25. D) $125.
The reason for the merger of two businesses that sell unrelated goods but can share business practices and sales forces might best be explained by:
A. economies of scale. B. economies of scope. C. learning by doing. D. indivisible costs.