Four fundamental factors affect the cost of money: (1) the return that borrowers expect to earn on their investments, (2) the preference of savers to spend their income in the current period rather than delay their consumption until some future period, (3) the risks associated with the investment, and (4) expected inflation. Consider the following statements that address these factors, and indicate which you think are true.
Statement 1: All things being equal, savers and investors expect to receive some amount of maturity premium as compensation for their deferred consumption.
Statement 2: Historical inflation rates, as opposed to expected future rates of inflation, should be used when calculating an investment’s nominal risk-free rate of return.
Statement 3: An investment that can provide a 10% return should attract more investment capital than an otherwise identical investment that can only provide a 6% return.
Statement 4: The inflation premium used to calculate the nominal interest rate on a five-year security should be equal to the rate of inflation expected in year 5 of the investment.
The true statements are:_______.
a. 1, 2, 3, and 4
b. 2 and 4
c. 1, 2, and 3
d. 1 and 3

Answers

Answer 1

Answer:

The true statements are 1 and 3

Step-by-step explanation:

Statement 1 -

All things being equal ,the savers and investors expect to receive some amount of maturity premium as compensation for their deferred consumption.

Statement 3 -

An investment that can provide a 10% return should attract more investment capital than an otherwise identical investment that can only provide a 6% return.

It is true because the return is higher than the return of identical investment  therefore the higher returns will attract more investment.

Statement 2-

It is a false statement.

Historical inflation rates should not be used when calculating an investment’s nominal risk-free rate of return

But the real risk free rate and  inflation premium is the part of prevailing interest rates that results from lenders compensating for expected inflation should be used

Statement 4-

It is a false statement.

The inflation premium used to calculate the nominal interest rate on a five-year security should not be equal to the rate of inflation expected in year 5 of the investment.

∴ we get

Statement 1 and 3 are true.


Related Questions

A, B, C and D form the vertices of a parallelogram
AD = 10.3cm, AB = 15.5cm and BAD = 63°
Find the area of the parallelogram. Round to 1 DP

The diagram is not drawn accurately.​

Answers

AB=8.7 cm. Work out the length of BC. ... 1. Adi. Diagram NOT accurately drawn. POR is a triangle. Angle Q = 90° ... Give your answer correct to 1 decimal place. ton o. Ady ... Ad. POR is a right-angled triangle. PR = 12 cm. OR = 4.5 cm. Angle PRO = 90°. ... AB= 7 cm. BC = 12 cm. Angle BAD= 65°. Calculate the length of AC.

I need help in my really struggle in math ​

Answers

Answer:

.

Step-by-step explanation:

.

Answer:

tell me a problen and I will help you solve it

Step-by-step explanation:

Jane cloaked in to world on Tuesday at 7:30 am and went to her lunch at 11:30 am. She returned from her lunch break at 12:30 pm and clocked out of work for the day at 4:00pm. How many hours did she work on Tuesday?

Answers

Answer:

7 hours 30 minutes

Step-by-step explanation:

Jane clocks into work at 7:30 and goes to lunch at 11:30. (4 hours)

4 hours so far.

takes 1 hour break and returns for 12:30.

She finishes at 4. Time from 12:30 to 4 is (3h30)

3h30 + 4 = 7h30m

Check yourself ^

Factor as the product of two binomials.
x^2 - 3x +2=

Answers

Answer:

(x−1)(x−2)

Step-by-step explanation:

Y=1/3x+14 in point slope form

Answers

Answer:

ok so.. whats the question?

Step-by-step explanation:

Answer:

y = 1/3x + 14

Step-by-step explanation:

The REASON THAT IS AN SLOPE INTERCEPT FORM IS BECAUSE IT IS ALREADY IN SLOPE INTERCEPT FORM.

486.664946274 + 541.24664245567 =

Answers

1027.91158873


jdndjdbbdkdkdjddn

Answer:

the answer is 1027.91159

Help me pls pls pls

Answers

Expo. Pls I don’t understand the picture
It will take exactly 18 minutes


So far, Monica has read ã of a book. She
has read the same number of pages each
day for 5 days. What fraction of the book
does Monica read each day?

Answers

How many pages are their?


You use a 40% off coupon followed by a 30% off coupon. is that
this is the same as a 70% off coupon. Explain

Answers

Answer:

Yes since 40+30=70 so it would be the same

Step-by-step explanation:

21< -4+5x Hurry I need it ​

Answers

x=5
uhhhhh because yea

Simplify (4j - 3.1c +5) + ( -7 - 4j - 0.9c)

Answers

the answer is = -4c -2

On an island, the deer population has been decreasing by 4% per year (). The current population is 792 deer.

Assume that the deer population continues to decrease by 4% per year. Which of the following logarithmic equations best models the number of years it will take for the deer population to decrease from 792 deer to 674 deer?

Answers

Answer:

X = log(0.96)(0.85)

Step-by-step explanation:

Given that on an island, the deer population has been decreasing by 4% per year and the current population is 792 deer, assuming that the deer population continues to decrease by 4% per year, to determine the number of years it will take for the deer population to decrease from 792 deer to 674 deer the following calculation must be performed:

792 x 0.96 ^ X = 674

X = 3.95

So, rounded to whole numbers, it will take 4 years for the deer population to drop to 674.

Can someone help me please answer my question.
Answers
A.6 inches
B.8 inches
C.10 inches
D.12 inches

Answers

The answer Is C. 10 inches
Answer: 6 inches

Step-by-step explanation:
volume of a rectangular prism is V=LWH
L is length and that is 20
W is width and that is 20
H is height and that is 6
The reason that L and W are 20 is because you would multiply those to get the base, and the base is already given, 400.
Since you know the volume is 2,400, a quick trick is that you divide 2,400/400. That equals 6.
So 20 x 20 x 6 = 2400

Ana, Profesora de Psicología de una escuela, planeo realizar un estudio sobre las
respuestas de los espectadores a ciertos aspectos de las peliculas A By Después
de encuestar su clase de 55 estudiantes, determinó la siguiente información: 17
han visto A. 17 han visto B. 23 han visto c. 6 han visto A y B. & han visto A y C 10
han visto By C 2 han visto las tres peliculas.
a. ¿Quántos estudiantes han visto exactamente dos de estas peliculas?
b. ¿Cuántos estudiantes han visto exactamente una de estas peliculas?
C. ¿Cuántos estudiantes no han visto estas películas?
d. ¿Cuántos estudiantes han visto A. pero ninguna de las otras?​

Answers

Answer:

The answer is below

Step-by-step explanation:

El número de personas que vieron solo A = n (A) = 17

El número de personas que vieron solo B = n (B) = 17

El número de personas que vieron solo C = n (C) = 23

El número de personas que vieron A y B = n (A ∩ B) = 6

El número de personas que vieron A y C = n (A ∩ C) = 8

El número de personas que vieron B y C = n (B ∩ C) = 10

El número de personas que vieron las tres películas = n (A ∩ B ∩ C) = 2

1) Número de estudiantes que han visto dos películas = n (A ∩ B) + n (A ∩ C) + n (B ∩ C) = 6 + 8 + 10 = 24

2)

n (A∩ B '∩ C') = n (A) -n (A ∩ B) -n (A ∩ C) -n (A ∩ B ∩ C) = 17-8-6-2 = 1

n (A'∩ B ∩ C ') = n (B) -n (A ∩ B) -n (B ∩ C) -n (A ∩ B ∩ C) = 17-6-10-2 = 1

n (A'∩ B '∩ C) = norte (C) -n (UNA ∩ C) -n (B ∩ C) -n (UNA ∩ B ∩ C) = 23-8-10-2 = 3

estudiantes que no han visto = 55 - n (A∩ B '∩ C') -n (A'∩ B ∩ C ') - n (A'∩ B ∩ C') - n (A ∩ B) -n ( B ∩ C) -n (UNA ∩ C) -n (A∩ B ∩ C) = 55-1-1-3-6-8-10-2 = 24

3)

número de alumnos que no han visto =

4)

número de estudiantes que vieron solo A = n (A∩ B '∩ C') = 1

The value of a boat is depreciating at a rate of 7% per year. In 2006, the boat was worth $17,300. Find the value of the boat in 2011. Enter the exponential decay function for this situation.
The exponential decay function is y = .

In 2011 the boat will be worth $ .

Answers

Answer:

Step-by-step explanation:

[tex]V=Ar^t\\ \\ V=17300((100-7)/100)^t\\ V=17300(0.93)^{(y-2006)}\\ V(2011)=17300(0.93)^{(2012-2006)}=\$ 11192.29[/tex]

What is the slope of a line that passes through the points (-3, 2) and (-6, 5)?
A. -3
B. -1
C. 1/3
D. 1

Answers

the answer will be c

Suppose that f(x) = 3 (8x - x^2)/256 for 0 < x < 8
Determine the following probabilities. Round all of your answers to 3 decimal places (e.g. 98.765).
a. P(X < 5)
b. P(X< 9)
c. P(5 < X < 7)
d. P(X > 3)
e. Determine x such that P(X < x) = 0.95

Answers

Answer and Step-by-step explanation: This function is a probability density function of a random variable X:

[tex]f(x)=\frac{3(8x-x^{2})}{256}[/tex]

and to calculate probabilities, we will have to integrate it:

[tex]P(X<x)=\int\limits^x_0 {\frac{3}{256}(8x-x^{2}) } \, dx[/tex]

Solving:

[tex]P(X<x)=\frac{3}{256}(4x^{2}-\frac{x^{3}}{3} )[/tex]

Then:

a. P(X < 5)

[tex]P(X<5)=\int\limits^5_0 {\frac{3}{256}(8x-x^{2}) } \, dx[/tex]

[tex]P(X<5)=\frac{3}{256}(100-\frac{125}{3} )[/tex]

[tex]P(X<5)=\frac{3}{256}(\frac{300-125}{3} )[/tex]

[tex]P(X<5)=\frac{175}{256}[/tex]

P(X < 5) = 0.683

b. P(X < 9)

Since density function's upper limit is 8, probability of x < 9 is 100% or 1.

So, P(X < 9) = 1

c. P(5 < X < 7)

[tex]P(5<X<7)=\int\limits^7_5 {\frac{3}{256}(8x-x^{2}) } \, dx[/tex]

[tex]P(5<X<7)=\frac{3}{256}[4(7)^{2}-\frac{7^{3}}{3}-4(5)^{2}+\frac{5^{3}}{3}][/tex]

[tex]P(5<X<7)=\frac{3}{256}[96-\frac{218}{3} ][/tex]

[tex]P(5<X<7)=\frac{70}{256}[/tex]

P(5 < X < 7) = 0.273

d. P(X > 3)

[tex]P(X>3)=\int\limits^8_3 {\frac{3}{256}(8x-x^{2}) } \, dx[/tex]

[tex]P(X>3)=\frac{3}{256}[256-\frac{512}{3}-36+9 ][/tex]

[tex]P(X>3)=\frac{3}{256}(229-\frac{512}{3} )[/tex]

[tex]P(X>3)=\frac{175}{256}[/tex]

P (X > 3) = 0.683

e. P(X < x) = 0.95

[tex]0.95=\int\limits^x_0 {\frac{3}{256}(8x-x^{2}) } \, dx[/tex]

[tex]\frac{3}{256}[\frac{12x^{2}-x^{3}}{3} ] =0.95[/tex]

[tex]\frac{12x^{2}-x^{3}}{256}=0.95[/tex]

[tex]12x^{2}-x^{3}=243.2[/tex]

[tex]-x^{3}+12x^{2}-243.2=0[/tex]

Solving this cubic equation, we have three values for x:

x₁ = -3.909

x₂ = 8.992

x₃ = 6.917

The value of x will the one between 0 and 8, which are the limits of the function. So, value of x which gives a probability of 0.95 is x = 6.917.

36 : 52 = __:__
a) 18:26
b) 2:3
d) 2:2
d 9:13

Answers

The answer to the following question is letter D

12 children in art class have to share 8 packages of clay so that everyone gets the same amount. How much clay can each child have?

Answers

Answer:8 y sobran 4

Step-by-step explanation:

8entre  4

Answer:

1.5

Step-by-step explanation:

If 3/4 pounds of Fudge coast $6. 75, how much does 1 pound cost. Write as an equation.

Answers

Divide 6.75 by 4 then you know the unit rate then multiply that by 4

To investigate whether or not sending text messages while driving impacts driving ability, we had 100 participants (50 men and 50 women) drive an obstacle course under one of the following conditions: 1) no texting while driving, 2) sending five text messages while driving, or 3) sending 10 text messages while driving. We measured the accuracy with which the subjects drove the obstacle course from a scale of 1 to 10 (1 = poor and 10 = excellent).We are testing the effect of sending text messages at three different _____.

a. treatments
b. levels
c. factors
d. None of the above

Answers

Answer:

A - treatments

Step-by-step explanation:

We are told the 100 participants were required to drive under 1 of the 3 conditions below which are;

- no texting while driving.

- sending five text messages while driving

- sending 10 text messages while driving

In experimental a research, these 3 conditions are referred to as treatments because they are used to derive an experimental result.

HELP PLS 30 PTS !!!!!!!!!!!!

Answers

Answer:

its the second one bc if u multiply 8.34 times 5305 it equals to 44243.7 the diameter of the pool was jus to throw u off it was unneeded information.

Step-by-step explanation:

I WILL GIVE BRAINLIEST PLS HELP!!!!

The hypotenuse of ANY right triangle is [tex]\sqrt{2}[/tex] times the leg.

TRUE OR FALSE AND ALSO EXPLAIN

Answers

true the hypotenuse is 6 squared

Help me from 3 through 8

Answers

Answer:

3)x=−9  and x=4

4)x=−12  and x=−5

5)x=8  and x=14

6)x=−7  and x=3

7)x=-1 2/3 and x = 1/4

8)x=2/5

Step-by-step explanation:

Hope this helps

a Basketball ticket costs $45 but they are having a promotional game night and all tickets are 25% off what is the new price of the ticket​

Answers

Answer:

Should be $11.25

Step-by-step explanation:

Since 25% is 1/4 you can just divide 45 by 4.

45/4 = 11.25

Answer: 33.75. 25% of 45 is 11.25. So 45-11.25=33.75

Step-by-step explanation:

Giving brainliest for the right answer so pls help me!

Answers

Answer:

Radius: 3.5

Diameter: 7

i might be wrong tho im sorry !!

The answer:

Radius = 3.5cm

Diameter = 7cm

I hope I've helped <3

NEED HELP ASAP!!!Of all the students who tried out for volleyball, 83% made the team what fraction of the students who tried out did NOT make the team?

Answers
4/5
1/5
3/4
1/3

Answers

Answer:I think it’s 1/5 but if u have another attemp and it’s wrong somehow do 1/3

Step-by-step explanation:

Answer:

3/4 or 1/3

Step-by-step explanation:

2. "The quotient of a number and 4"

Answers

Answer:

Step-by-step explanation:

let n= number, the quotient of a number and 4 is

n/4

Help now plsssssssssssssssssssssss

Answers

Answer:

Your answer is 5009.2

Upvote it. Welcome

Answer:

5009,206

Step-by-step explanation:

Hope this helped!

Evaluate 3(c + d) if c = 8 and d = -5

Answers

Substitution time :D

c = 8

d = -5


All you have to do is replace the variables(letters) with the numbers!


3(8 + (-5))

Do parentheses first! And remember that adding a negative is the same as subtracting :)

3(3) = 9
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