Explain the ideas of a risk-free rate and the real rate of interest. Is either of them

Question:

Explain the ideas of a risk-free rate and the real rate of interest. Is either of them approximated by anything that exists in the real world?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Practical financial management

ISBN: 978-0324422634

5th Edition

Authors: William r. Lasher

See More Books

Question Posted: Sep 13, 2012 03:36 AM

See More Questions

Assume a risk free rate is 4%, an asset return estimate of 10% and the value of standard deviation of estimated return of 12%. What is the slope of the assets CML (Capital Market Line)?
Why are nutrients considered pollution? Explain the ideas of eutrophication and an oxygen sag.
1. How does Bostrom explain the ideas of morphological freedom and reproductive freedom? How are they different? 2. How does Bostrom characterize the concerns of bioconservatives? 3. Explain why...
Each table of values gives several points that lie on a line.(a) What is the x-intercept of the line? The y-intercept?(b) Which equation in choices AD corresponds to the given table of values?(c)...
Metal rods are spray painted by a machine and a p-chart is to be used to monitor the proportion of rods that are not painted correctly. These defective rods have either an incomplete coverage or a...
Describe how accounts, debits, and credits are used to record business transactions.
List various types of gears.
Micromedia offers computer training seminars on a variety of topics. In the seminars each student works at a personal computer, practicing the particular activity that the instructor is presenting....
A loan has a stated annual rate of 19.71%. If loan payments are made monthly and interest is compounded monthly, what is the effective annual rate of interest? You invest $3,679.00 at the beginning...
Create a list of at least 10 books (Title, Author, Price, Book_id) with the following functions: 1) Sequential insert in the list on the basis of Book_id 2) Sequential delete in the list and then...
Do all loans have default, liquidity, and maturity risk more or less equally? Are some types of loans relatively free of some risks? Is the debt of a particular organization free of certain risks? If...
What is a yield curve? Briefly outline three theories that purport to explain its shape. How does the yield curve influence the behavior of lenders?
Some digital thermometers measure the current through a semiconductor to determine a patient's temperature. If a thermometer uses a germanium wire that has a resistance of R at 37.0C (normal body...
Briefly identify and describe the client populations that you would like to serve and in what setting. Identify two employers you would like to work for and share with the class what populations the...
2. In January 2016, the Free Cancer Foundation accepted an endowment of $500,000, the income from which is restricted to promoting research related to recovery from cancer. All gains, whether...
Explain what Coates means when he writes about learning to live within your own body.? Explain this in your own words.
A resistor with color code yellow, brown, black, gold measures 42.6 2 on the multimeter. What is the coded resistance? What is the tolerance range? Is this resistor within tolerance? (6 pts.) Rm=...
Explain how criminalization of sexual behaviors is a form of social control. Why is it important to talk about heterosexual privilege and not only LGBTQ inequality? What is a heteroarchy? Why is it...
Distinguish between paternalistic and maternalistic styles of leadership. What cultural factors would have to be in place for one or the other styles to work effectively?
For the vector whose polar components are (Vr = 1, VÎ¸ = 0), compute in polars all components of the second covariant derivative VÎ±;Î¼;Î½. To find...
Calculate the monthly finance charge for each credit card transaction in Problems 31-34. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long....
What is the primary disadvantage of the of the corporate form of organization? Name at least two of the advantages of corporate organization.
What is the primary disadvantage of the of the corporate form of organization? Name at least two of the advantages of corporate organization.
Roll With It Company has a book net worth of $41,000. Long term debt is $6,800. Net working capital, other than cash, is $4,100. Fixed assets are $38,500. How much cash does the company have? If...
1. Write a Java program that will prompt the user for a number and print out a square with those dimensions. For example, if the user enters 5, return the following: * * * ** ** * * * * * * * * * * *...
2. Vector multiplication or dot product is performed by multiplying corresponding elements and summing the products. It can be represented mathematically as oa; *bi where a and b are vectors of...
The following data was collected from an experiment testing the hypothesis: The density of cream whipped for 5 minutes increases at higher altitudes. What would be an acceptable interpretation of...

Explain the ideas of a risk-free rate and the real rate of interest. Is either of them

Question:

Step by Step Answer:

The riskfree rate is the rate on a loan without default liquidity or mat...View the full answer

Practical financial management

Students also viewed these Corporate Finance questions