Real Risk Free Rate of Interest

Related BrainMass Solutions

• Real risk-free rate of return

  or 5.5% = k* (real risk-free rate of interest ) +3.25% or real risk-free rate of interest = 5.5% - 3.25%= 2.25% Answer: real risk- free rate of return= 2.25% Calculates real risk-free rate of return.

• Real risk-free rate of return

  Thus k= 8.00% IP = inflation premium = 5.00% k*= k - IP = 3.00% =(8.%-5.%) Answer: real risk-free rate of interest on the 30 day T-bill= 3.00% The solution calculates the real risk-free rate of return using Inflation

• Calculating the Real Risk-Free Rate of Return

  of these data, what is the real risk-free rate of return?

• Risk free real rate of return

  251294 Risk Free Real Rate of Return What is the risk free real rate of return? 1) You read in the Wall Street Journal that 30 day U.S. treasury bills are currently yielding 8%.

• Nominal Interest Rate on a security

  Six factors that determine the nominal interest rate on a security are real risk-free rate, default risk, maturity risk, liquidity risk, premium for expected inflation, and quoted rate on a risk-free security.

• Yield on two and three year treasury securities

  and 3 year treasury securities are calculated, given real risk free rate of interest, inflation and maturity risk premium.

• According to the expectations theory and showing the computations, what should be the interest rate on 3-year, risk-free securities today?

  61064 Risk Free Security The real risk-free rate of interest is 3 percent. Inflation is expected to be 4 percent this coming year, jump to 5 percent next year, and increase to 6 percent the year after (Year 3).

• interest rate on 3-year, risk-free securities

  61075 Expectations theory: what should be the interest rate on 3-year, risk-free securities? 1. The real risk-free rate of interest is 3 percent.

• Yield on a Treasury Bond

  risk-free rate of interest.