What is the amount of the risk premium on a U.S. Treasury bill if the inflation rate is 2.6 percent, the risk-free rate is 3.1 percent, and the market rate of return is 7.4 percent?
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Q: If the return on U.S. Treasury bills is 7.02%, the risk premium is 2.32%, and the inflation rate is…
A: Real Rate of Return = Nominal Rate - Inflation Rate
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A: Nominal Interest Rate: It refers to the rate of interest that does take into consideration the…
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A: Real risk free rate = 1.25% Inflation premium = 2.50% Default risk premium = 5% Liquidity premium =…
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A: Risk-free rate: This can be described as the rate of return of the asset which has zero risks.…
Q: If the return on U.S. Treasury bills is 7.02%, the risk premium is 2.32%, and the inflation rate is…
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A: Nominal rate = 5.48% Inflation rate = 2.68%
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- If the risk-free rate is 2.2 percent, the inflation rate is 1.9 percent, and the market rate of return is 6.8 percent, what is the amount of the risk premium on a U.S. Treasury bill?If Treasury bills are currently paying 3.05 percent and the inflation rate is 1.89 percent, what is the approximate real rate of interest? The exact real rate? Can the calculator and excel solution be provided?Suppose the real rate is 3.1 percent and the inflation rate is 4.7 percent. What rate would you expect to see on a Treasury bill?
- If the risk-free rate is 2.2 percent, the inflation rate is 1.9 percent, and the market rate of return is 6.8 percent, what is the amount of the risk premium on a U.S. Treasury bill? O 2.8% O 0.5% O 1.7% « > A Moving to another question will save this response.The market has an expected rate of return of 12.0 percent. The long-term government bond is expected to yield 4.8 percent and the U.S. Treasury bill is expected to yield 2.3 percent. The inflation rate is 3.2 percent. What is the market risk premium?The following data are gathered for:· The real risk-free rate is 1.25%· Inflation premium is constant at 2.50%· Default risk premium is 5%· Liquidity risk premium is 0.50% What is the quoted rate on a short-term government security?
- which one is correct please confirm? QUESTION 21 If the return on U.S. Treasury bills is 7.02%, the risk premium is 2.32%, and the inflation rate is 4.16%, then the real rate of return is ____. a. 7.02% b. 6.48% c. 4.70% d. 2.86%The following data are gathered for: · The real risk-free rate is 1.25% · Inflation premium is constant at 2.50% · Default risk premium is 5% · Liquidity risk premium is 0.50% What is the quoted rate on a short-term government security? (Format: X.XX%)of interest? The exact real rate? 10. Inflation and Nominal Returns Suppose the real rate is 1.8 percent and the inflation rate is 3.7 percent. What rate would you expect to see on a Treasury bill? 11. Nominal and Real Returns An investment offers a total return of 12 percent
- suppose that real risk free rate is 3.40% and the future rate of inflation is expected to be constant at 1.50%. What rate of return would you expect on a Treasury Bill, assuming the pure expectations theory is valid.What would you expect the nominal rate of interest to be if the real rate is 4.2% and the expected inflation rate is 7.2%?What would you expect the nominal rate of interest to be if the real rate is 5.3 percent and the expected inflation rate is 2.8 percent?