Ask Question
BusinessBusiness
21 October, 02:55

Which, if any, of the following is true of the inflation premium: Multiple Choice compensates investors for expected price increases. rewards investors for accepting interest rate risk. remains constant over time. is inversely related to the time to maturity. increases the real return.

+3
Answers (1)
  1. 21 October, 06:50
    0
    The correct answer is letter "A": compensates investors for expected price increases.

    Explanation:

    Inflation is the result of steady increases in prices in a market as the result of a steady increase in demand. An inflation premium is the portion of the prevailing interest rates arising from borrowers compensating for expected inflation by raising nominal interest rates to higher. Economists and investors perceive real interest rates as the nominal interest rate, minus the inflation premium. However, the inflation premium cannot be computed because it relies on expectations for the future.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Which, if any, of the following is true of the inflation premium: Multiple Choice compensates investors for expected price increases. ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
How does the visibility of groups such as blacks and Asians contrast with the invisibility of white ethics in shaping their organization experiences?
Answers (1)
A successful quality strategy begins with
Answers (1)
A contractor figured materials for a job would cost $2,415. He also estimated labor for the same job would cost $1,832. If he adds 18% to cover overhead and profit, how much will he charge the customer for this job?
Answers (1)
John wants to retire 30 years from now. He doesn't know how many years he'll actually live after he retires, so he'd like to save up enough to spend $60,000 per year forever. That way, he can never outlive his retirement savings.
Answers (1)
Which of the following statements about culture change is false? Multiple Choice Managers should use a structured approach to changing cultures. To change culture, start by targeting artifacts, espoused values, and basic assumptions.
Answers (2)
New Questions in Business
Which statement best describes how governments respond to changes in the business cycle? Check all that apply governments make current see more available governments refuse to pass a budget governments change their policies governments reduce
Answers (2)
Corporate shareholders: A. are proportionately liable for the firm's debts. B. are protected from all losses. C. have the ability to change the corporation's bylaws. D.
Answers (1)
Cash $ 14,000 Accounts payable $ 42,000 Receivables 70,000 Other current liabilities 28,000 Inventories 210,000 Total CL $ 70,000 Total CA $294,000 Long-term debt 70,000 Net fixed assets 126,000 Common equity 280,000 Total assets $420,000 Total liab.
Answers (1)
An employment test for men is used by a police department to find successful candidates. A woman who was denied employment with the police department based on her test scores sues the police chief.
Answers (1)
What is a great marketing strategy
Answers (2)
Home » Business » Which, if any, of the following is true of the inflation premium: Multiple Choice compensates investors for expected price increases. rewards investors for accepting interest rate risk. remains constant over time.
Sign Up Forgot Password?