The market interest rate if is 12% per year compounded semiannually. For an inflation rate of 2%

Question:

The market interest rate if is 12% per year compounded semiannually. For an inflation rate of 2% per 6 months, the effective semiannual interest rate is closest to:
(a) 2%
(b) 3%
(c) 4%
(d) 6%

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

Step by Step Answer:

Related Book For book-img-for-question

Engineering economy

ISBN: 978-0073376301

7th Edition

Authors: Leland Blank, Anthony Tarquin

See More Books

Question Posted: Dec 17, 2012 06:27 AM

See More Questions

If you think the market interest rate is going to drop in the near future, should you invest in bonds?
Some of the problems associated with market intervention include: Resource allocation is in disequilibrium Public ownership can lead to waste and poor service Subsidies must be paid for eventually O...
The market interest rate is 5% and is expected to stay at that level. Consumers can borrow and lend all they want at this rate. Explain your choice in each of the following situations: a. Would you...
Consider four advertising campaigns where for each one it is cancelled before launch with probability 0.10, it is launched but canceled early with probability 0.18, it is launched and runs its...
Use the results of the last example in Section 7.6 to evaluate /(2m + 1)). -0
Electromagnetic technologies offer effective nondestructive sensing techniques for determining characteristics of pavement. The propagation of electromagnetic waves through the material depends on...
Football and Brain Size A recent study examined the relationship of football and concussions on hippocampus volume in the brain. The study included three groups with $n=25$ in each group: heathy...
In its 2009 annual report, Campbell Soup Company reports beginning-of-the-year total assets of $6,474 million, end-of-the-year total assets of $6,056 million, total sales of $7,586 million, and net...
Mountain Air Limited manufactures a line of room air purifiers. Management is currently evaluating the possible production of an air purifier for automobiles. Based on an annual volume of 1 0 , 0 0 0...
Ken and Larry, Inc., supplies its ice cream parlors with three flavors of ice cream: chocolate, vanilla, and banana. Due to extremely hot weather and a high demand for its products, the company has...
If the market interest rate is 16% per year when the inflation rate is 9% per year, the real interest rate is closest to: (a) 6.4% (b) 7% (c) 9% (d) 15.6%
Construction equipment has a cost today of $40,000. If its cost has increased only by the inflation rate of 6% per year, when the market interest rate was 10% per year, its cost 10 years ago was...
The data on the weight (lb) of male and female wolves, from Table D.9 of the Data Bank, are (a) Test the null hypothesis that the mean weights of males and females are equal versus a two-sided...
A multiple regression model differs from a simple linear regression model because the multiple regression model has more than one a. independent variable. b. dependent variable. c. intercept. d....
If the EOQ assumptions are met and a company orders more than the economic order quantity, then a. total annual holding cost will be greater than the total annual ordering cost. b. total annual...
The reorder point is a. the quantity that is reordered each time an order is placed. b. the amount of inventory that would be needed to meet demand during the lead time. c. equal to the average...
If a nonredundant constraint is removed from an LP problem, then a. the feasible region will get larger. b. the feasible region will get smaller. c. the problem would become nonlinear. d. the problem...
If the multiplicative decomposition model is used to forecast daily sales for a retail store, how many seasons will there be? a. 4 b. 7 c. 12 d. 365
What is a bank loan? What are the different ways in which a bank can acquire loans?
14. In testing the existence assertion, an auditor ordinarily works from the a. Financial statements to the accounting records. b. General journal to the general ledger. c. Supporting evidence to the...
Which of the following statements about a journal is false? (a) It is not a book of original entry. (b) It provides a chronological record of transactions. (c) It helps to locate errors because the...
Consider the following three mutually exclusive alternatives: For what range of values of MARR is Alt, C the preferred alternative Put your answer in the following form: "Alternative C is preferred...
Consider four mutually exclusive alternatives, each having an 8-year useful life: If the minimum attractive rate of return is 8%, which alternative should be selected? A B D First cost Uniform annual...
Three mutually exclusive projects are being considered: When each project reaches the end of its useful life, it would be sold for its salvage value and there would be no replacement. If 8% is the...
This project requires an investment in fixed assets, at time 0, of 44,000,000. Assets will be depreciated straight line in 5 years. This project has a 4 year life. The revenues for each of the 4...
Lorenzo Company applies overhead to jobs on the basis of direct materials cost. At year - end, the Work in Process Inventory account shows the following. Work in Process Inventory Date Explanation...
T-bill with a $10,000 par has 174 days until maturity. The T-bill has a bank discount bid quote of 2.208% and ask quote of 2.198%. What is the return on the investment in this T-bill if the trader...

The market interest rate if is 12% per year compounded semiannually. For an inflation rate of 2%

Question:

Step by Step Answer:

Given market interest rate 12 per year 6 semiannual Inflatio...View the full answer

Engineering economy

Students also viewed these Economics questions