What is the approximate real rate of interest

Assignment Help Financial Management
Reference no: EM131025874

Treasury bills are currently paying 5 percent and the inflation rate is 2.5 percent. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Approximate real rate % What is the exact real rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Exact real rate %

Reference no: EM131025874

Questions Cloud

How row operations can be used to solve the matrix : Show specifically how row operations can be used to solve the matrix.
Primary difference between treasury bills and treasury bonds : The primary difference between U.S. Treasury bills and U.S. Treasury bonds is that the bills:
Determine average power and state whether power delivered : Consider the circuit shown in Figure. Determine the values of I1 and V2. For each of the sources, determine the average power and state whether power is delivered by or absorbed by the source.
Consider two stocks-expected return and standard deviation : Consider two stocks, Stock D, with an expected return of 11 percent and a standard deviation of 26 percent, and Stock I, an international company, with an expected return of 9 percent and a standard deviation of 19 percent. The correlation between th..
What is the approximate real rate of interest : Treasury bills are currently paying 5 percent and the inflation rate is 2.5 percent. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Approximate real rate % What is the exact r..
Appropriate discount rate-what is the present value : An investment will pay you $90,000 in three years. Assume the appropriate discount rate is 6.00 percent compounded daily. What is the present value?
What turns ratio is required for the transformer : A transformer is needed that will cause an actual load resistance of 25Ω to appear as 100Ω to an ac voltage source of 240 V rms. Draw the diagram of the circuit required. What turns ratio is required for the transformer? Find the current taken fro..
A firm has a target debt to equity ratio : Junior Interiors market value capital structure of 62% Common Equity, 3% Preferred Stock (PS) and 35% Debt. The company does not pay dividends, and evaluates its operations as approximately 30% more risky than an “average” company in the industry. Wh..
Draw a diagram and find out equilibrium price and quantity : Draw a diagram and find out the equilibrium price and quantity. Suppose the government sets a price ceiling of $11. What will be the effect of such a policy: a shortage or a surplus of how much

Reviews

Write a Review

Financial Management Questions & Answers

  What is the price range of houses they should consider

The Johnsons have accumulated a nest egg of $15,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minim..

  What is the length of the annuity time period

You are considering an annuity which costs $72,600 today. The annuity pays $5,100 a year. The rate of return is 4 percent. What is the length of the annuity time period?

  Issue of preferred stock

E-Eyes.com has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. If you require a return of 9.25 percent on this stock, how much sho..

  Pay today for a share of fancy threads common stock

The owner of Fancy Threads, a national high-end women’s boutique is considering opening a boutique on Grand River Avenue. The company has experienced phenomenal sales growth, and you are considering buying some of their stock. how much would you pay ..

  What is the current dividend yield

The expected dividend payment next year of Extra Bounty Corporation will be $5.00 per share and expected to grow at a constant rate of 3.5% indefinitely. The investors require a rate of return of 8.25% on this stock. How much would you pay for this s..

  What is the hedge ratio of the call

We will derive a two-state put option value in this problem. Data: S0 = 170; X = 180; 1 + r = 1.1. The two possibilities for ST are 210 and 90. a. The range of S is 120 while that of P is 30 across the two states. What is the hedge ratio of the call?

  The expected return on a portfolio

The expected return on a portfolio: can never exceed the expected return of the best performing security in the portfolio. must be equal to or greater than the expected return of the worst performing security in the portfolio.

  What would be the full economic price of this legislation

From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $14 million in withdrawals from other banks’ ATM machines. What would be the f..

  Which is better current ration

which is better current ration? is it possible to run a company with a negative cash flow for: what is the future value of :

  Municipal bonds of equal risk currently yield

Corporate bonds issued by Johnson Corporation currently yield 12%. Municipal bonds of equal risk currently yield 7%. At what tax rate would an investor be indifferent between these two bonds?

  What annual interest rate-save any additional funds

Your parents will retire in 20 years. They currently have $230,000, and they think they will need $1 million at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer..

  Stock purchase agreement between parties-recitals-convenants

Roger is preparing to buy all of the stock of FlyNet Inc., a successful C Corporation that is owned by five individuals. He knows that there are others in the wings ready to make an offer for the stock. He needs to move fast and he needs to be reason..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd