Question: I need help step by steps how to resolve this problems. thank you I appreciated 1) If the real risk-free rate of interest is 4.9%
I need help step by steps how to resolve this problems. thank you I appreciated
1) If the real risk-free rate of interest is 4.9% and the rate of inflation is expected to be constant at a level of 3.6%, 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?
2) At present, the real risk-free rate of interest is 1.7%, while inflation is expected to be1.8% for the next two years. If a 2-year Treasury note yields 6.2%, what is the maturity-risk premium for this 2-year Treasury note?
3) If the 10-year Treasury bond rate is 5.1 % the inflation premium is 2.7%, and the maturity-risk premium on 10-year Treasury bonds is 0.4 % assuming that there is no liquidity-risk premium on these bonds, what is the real risk-free interest rate?
4) Prepare an income statement and a common-sized income statement from the following information
| Sales | $525,298 |
| |
| Cost of goods sold | $199,536 | ||
| General and administrative expense | $60,208 | ||
| Depreciation expense | $8,196 | ||
| Interest expense | $11,066 | ||
| Income taxes | $98,517 |
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