Suppose 1-year T-bills currently yield 7.90% and the future inflation rate is expected to be constant at 5.40% per year. What is the real risk-free rate of return, r"? Disregard any cross-product terms, i.e., if averaging is required, use the arithmetic a average. a. 13.30% b. 2.50% Oc. 8.33% d. 6.65% e. 7.90%

Suppose 1-year T-bills currently yield 7.90% and the future inflation rate is expected to be constant at 5.40% per year. What is the real risk-free rate of return, r"? Disregard any cross-product terms, i.e., if averaging is required, use the arithmetic a average. a. 13.30% b. 2.50% Oc. 8.33% d. 6.65% e. 7.90%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Wildhorse Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2025. Wildhorse had the following transactions related to notes payable Sept. 1 Sept. 30 Oct. 1 Oct. 31 Nov. 1 Nov. 30 Dec. 1 Dec. 31 Issued a $13,200 note to Pippen to purchase inventory. The 3-month note payable bears interest of 9% and is due December 1. (Wildhorse uses a perpetual inventory system) Recorded accrued interest for the Pippen note. Issued a $22,800, 9%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1. Recorded accrued interest for the Pippen note and the Prime Bank note. Issued a $24,000 note and paid $7,600 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 6% and matures in 12 months. Recorded accrued interest for the Pippen note, the Prime Bank note, and…
On the basis of the following data taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet for the year ended March 31 for Banes Domino's Corporation, journalize the two closing entries Banes Domino's Corporation Adjusted Trial Balance March 31 Debit Credit Cash 30,000 Accounts Receivable 45,200 Supplies 5,000 Equipment 169,900 Accumulated Depreciation 32,000 Accounts Payable 12,500 Common Stock 51,600 Retained Earnings 20,000 Dividends 47,000 Fees Earned 510,000 Salary Expense 244,500 Rent Expense 48,000 Depreciation Expense 25,000 Supplies Expense 9,500 Miscellaneous Expense 2,000 626,100 626,100 If an amount box does not require an entry, leave it blank.
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On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $980,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $790,000, retained earnings of $340,000, and a noncontrolling interest fair value of $420,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing. During the next two years, Smashing reported the following: Inventory Dividends Purchases from Net Income Declared Corgan $190,000 210, 000 $240, 000 $44,000 54,000 2020 2021 220,000 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 50 percent of the current year purchases remain in Smashing's inventory. a. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2021. b. Prepare the worksheet…
Presented below is information related to the purchases of common stock by Carla Company during 2020. Cost Fair Value (at purchase date) (at December 31) Investment in Arroyo Company stock $107,000 $88,000 Investment in Lee Corporation stock 230,000 278,000 Investment in Woods Inc. stock 190,000 200,000 Total $527,000 $566,000 (Assume a zero balance for any Fair Value Adjustment account.) (a) What entry would Carla make at December 31, 2020, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? (b) What entry would Carla make at December 31, 2020, to record the investments in the Lee and Woods corporations, assuming that Carla did not select the fair value option for these investments?
Which one is posted in the journal 1 p posting reference? * O amount O date O account name O account number This is a required question 1 pc
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Question Completion Status: QUESTION 2 Posting: transfers journal entries to ledger accounts. a. transfers ledger transaction data to the journal. Ob. is an optional step in the recording process. c. normally occurs before journalizing. d. QUESTION 3 Q5. All statement are limitations of trial balance Except: Click Save and Submit to save and submit. Click Save AlZ Answers to save all answers.

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