If the six-month Treasury bill has an interest rate of 0.5%, the ten-year Treasury bond has an interest rate of 1.6%, and a ten-year bond issued by Dell has an interest rate of 4%, what is the risk premium on Dell's bond?
What will be an ideal response?
The risk premium is 4% - 1.6% = 2.4%
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China has developed a comparative advantage in the production of clothing. The source of this comparative advantage is
A) investment in capital used to produce clothing. B) a large supply of natural resources. C) a large supply of unskilled workers and relatively little capital. D) superior process technology.
According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 . and the velocity of money equals one, then the price level will equal
a. $0.13 b. $1.25 c. $8 d. $200 e. $8,000
Karl Marx and Friedrich Engels believed that the ideal communist society would come about when
A. the state withered away. B. the state gained control of the economy's means of production. C. there was private ownership of the means of production. D. all large corporations remained in private hands, but were regulated by the government.
Advocates of a fixed exchange rate system argue that fixed exchange rates promote international trade
Indicate whether the statement is true or false