The nominal, risk-free rate on T-bills recently is 1.95%. If the real rate of interest is 0.75%, what is the expected level of inflation?
The nominal, risk-free rate on T-bills recently is 1.95%. If the real rate of interest is...
(Real interest rates: approximation method) If the real risk-free rate of interest is 4.4 %4.4% and the rate of inflation is expected to be constant at a level of 3.4 %3.4%, what would you expect 1-year Treasury bills to return if you ignore the cross product between the real rate of interest and the inflation rate? The expected rate of return on 1-year Treasury bills is nothing%. (Round to one decimal place.)
You are considering investing money in Treasury bills and wondering what the real risk-free rate of interest is. Currently, Treasury bills are yielding 7.0% and the future inflation rate is expected to be 4.5% per year. Ignoring the cross product between the real rate of interest and the inflation rate, what is the real risk-free rate of interest? The real risk-free rate of interest is _% round to one decimal place
Which of these is TRUE of the nominal risk-free rate and the real risk-free rate? Real risk-free rate must always include inflation premium Nominal risk-free rate includes inflation while real risk-free rate does not Real risk-free rate excludes the product of inflation and inflation premium None of the above
The real risk-free rate, r*, is 1.95%. Inflation is expected to average 2.9% a year for the next 4 years, after which time inflation is expected to average 3.75% a year. Assume that there is no maturity risk premium. An 8-year corporate bond has a yield of 8.95%, which includes a liquidity premium of 0.9%. What is its default risk premium? Do not round intermediate calculations. Round your answer to two decimal places.
6-2 REAL RISK-FREE RATE You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.8%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: • Inflation premium = 3.25% • Liquidity premium = 0.6% • Maturity risk premium = 1.85% • Default risk premium = 2.15% On the basis of these data, what is the real risk-free rate of return?
Higie a. real rate b. nominal rate C. risk-free rate d. prime rate Sae. inflation rate 3. Which of the following describes the observed or stated interest rate? a. real rate b. nominal rate c. risk-free rate d. prime rate e. inflation rate
(Real interest rates: approximation method) You are considering investing money in Treasury bills and wondering what the real risk-free rate of interest is. Currently, Treasury bills are yielding 5.6 % and the future inflation rate is expected to be 3.3 %) per year. Ignoring the cross product between the real rate of interest and the inflation rate, what is the real risk-free rate of interest? The real risk-free rate of interest is nothing____ %. (Round to one decimal place.)
The real risk-free rate is 2%, and inflation is expected to be 3% this year, 4% in year 2, 5% in year 3 and then 3.5% thereafter. The maturity risk premium is estimated to be 0.50x(t-1), where t=number of years to maturity. What is the nominal interest rate on a 15-year Treasury security?
13) The nominal required return on XYZ stock is 14%. The nominal risk-free rate of return is 4% and the real risk-free rate of return is 2%. How much are investors requiring as compensation for risk? What is the inflation premium?
The real risk-free rate of interest is expected to remain constant at 2.5%. The inflation rate is expected to be 3% (Year 1), 4.2% (Year 2), and 4.6% thereafter. The maturity risk premium (MRP) is equal to 0.079(t-1)%, where t-the bond's maturity. A 4-year corporate bond yields 8%, what is the yield on a 10-year corporate bond that has the default risk and liquidity premiums 1% higher than that of the 4-year corporate bond? The real risk-free rate of interest...