In early October 2008, before the Global Financial Crisis broke, the SA risk premium was a low 2%. But by 24 October that month, the risk premium had risen devastatingly to 6.5%. By the end of that tumultuous year, the risk premium had declined to a still elevated and expensive 4%. On 19 October 2015, the risk premium before Nenegate was an average of 2.4%. But by 20 January 2016, the risk premium had topped out at 3.89%, a 150-bps increase. This declined after the Ministry of Finance had been restored to what was regarded as safer hands. a. The above paragraph notes two economic shocks which resulted in changes (initial increase,

In early October 2008, before the Global Financial Crisis broke, the SA risk premium was a low 2%. But by 24 October that month, the risk premium had risen devastatingly to 6.5%. By the end of that tumultuous year, the risk premium had declined to a still elevated and expensive 4%. On 19 October 2015, the risk premium before Nenegate was an average of 2.4%. But by 20 January 2016, the risk premium had topped out at 3.89%, a 150-bps increase. This declined after the Ministry of Finance had been restored to what was regarded as safer hands. a. The above paragraph notes two economic shocks which resulted in changes (initial increase,

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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