**Determinants of Interest Rate for Individual Securities**A particular security's default risk premium is 3.10 percent. For all securities, the inflation risk premium is 2.10 percent and the real interest rate is 2.30 percent. The security's liquidity risk premium is 0.80 percent and maturity risk premium is 1.00 percent. The security has no special covenants. What is the security's equilibrium rate of return?

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If you want to measure the performance of your investment in a fund, including the timing of your purchases and redemptions, you should calculate the __________. a. geometric average return b. arithmetic average return c. dollar-weighted return d. index return Don't answer by pen paper and don't use chatgpt otherwise we will give dounvote
A company is setting up a project to build housing units, and the investment volume is estimated at one million dollars to build 100 homes, and the price of the house is 20 thousand dollars, to be paid in unequal installments for 4 years, where the first installment is 40% of the price of the house, the second installment is 30%, the third installment is 20%, and the fourth installment is 10%. The annual costs are 50 thousand dollars. Calculate the simple rate of return, the payback period and the internal rate of return for the project, knowing that the lowest discount rate is 8% and the highest is 12%. Will the project be accepted or rejected?
i will 10 upvotes urgent Securities with less predictable prices and have longer maturity time is considered as A. cash equivalents B. long-term investments C. inventories D. short-term investments
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7 Find the amount needs to be invested if the investors want to receive an annual net income worth 5,400,000 for 7 years. Use the Hoskold's Formula to compute the priceif the money is worth 8% on sinking fund and the yield of interest is 5%.Price =
The real risk free rate is 3.3%. Inflation is expected to be 3.05% this year, 4.05% next year, and 2.1% thereafter. The maturity risk premium is estimated to be 0.05 x (t-1), wheret - number of years to maturity. What is the yield on a 7-year Treasury note?
Question a Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line. . .
2) Two annuity dues in perpetuity have a common present value of $2, 000 and a common effective anmual interest rate i. The first anmuity makes payments of $100 at the beginning of every three years and the second makes payments of X at the beginning of every three months. Find X.
TIME SENSITIVE You are considering a generous offer from two banks for your savings account. Bank A is offering an interest rate of 6% p.a. Bank B’s rate is 6% p.a. compounded semiannually. For a deposit amount of $1,000 today, determine: 1.Bank B’s effective semiannual and yearly rates. 2.Your account balance at the end of 5 years for both banks. 3.Which bank you would choose to do business with and why.draw cash flow diagram.
Answer the following as indicated. (Format: problem, then, solution) 8. A bond with a face value of P1,000 has a 3% coupon and an 8-year maturity date. Find the interest.
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