the matterhorn corporation is trying to choose between the following two mutually exclusive design projects: a. if the required return is 11 percent and the company applies the profitability index decision rule, which project should the firm accept? b. if the company applies the npv decision rule, which project should it take? c. explain why your answers in parts (a) and (b) are different.

Answers

Answer 1

The Profitability index of Project I is 1.10

Calculation of Profitability Index for each project:

Required rate of return = 11%

The project I: Profitability Index:

PI=\frac{Present value of cash inflows}{Present value of cash outflows}

Present value of cash inflows = \frac{\$24,000}{\left (1+0.11 \right )^{1}}+\frac{\$29,000}{(1+0.11)^{2}}+\frac{\$36,000}{(1+0.11)^{3}}

Present value of cash inflows = \frac{\$24,000}{\left (1.11 \right )^{1}}+\frac{\$29,000}{(1.11)^{2}}+\frac{\$36,000}{(1.11)^{3}}

Present value of cash inflows=\frac{24,000}{1.11}+\frac{29,000}{1.2321}+\frac{36,000}{1.3676}

Present value of cash inflows=21,621.6+23,537.05+26,323.48

Present value of cash inflows=71,482.13

Present value of cash outflows= $65,000

PI=\frac{\$71,482.13}{\$65,000}> 1.10

Therefore, the Profitability index of Project I is 1.10

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Related Questions

On january 1 providence, incorporated, issues $1,000,000 of 10 percent, 5-year bonds at par value. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

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The journal entry entering the dollar amount in debit or credit columns is

Date      Particulars                    Debit                           Credit

01-Jan-19 Cash             $10,00,000

         Bonds Payable                                                      $10,00,000

The bond is issued for $1,000,000 and cash is received from that bond. Thus, a cash identifier is debited and a liability is created in this case. The accrued interest will be charged as interest expense at the end of the period.

Journal entry :

A journal entry is the act of keeping or recording all economic or non-economic transactions. Transactions are listed in an accounting journal that shows the company's debit and credit balances. A journal entry can include multiple records, each of which is a debit or a credit. A journal entry is used to record a business transaction in a company's accounting records. A journal entry is usually recorded in the general ledger; alternatively, it can be recorded in a sub-ledger, which is then summarized and included in the general ledger

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miller brothers hardware paid an annual dividend of $1.15 per share yesterday. today, the company announced that future dividends will be increasing by 2.6% annually. if you require a 12% rate of return, how much are you willing to pay to purchase one share of this stock today? o a. $9.83 o b. $9.81 o c. $12.23 o d.$12.55

Answers

An annual dividend is a yearly payment made to an insurance policyholder, most often of a permanent life insurance or long-term disability policy.

How are annual dividends calculated?

If a company pays monthly dividends, you can multiply the payment amount by the number of payments in a year, which means you can multiply the dividend by 12 to get an annual rate dividend per share.

Use the P equation on the formula sheet

P0 = (Dividend x (1 + Growth)) / (required rate of return - growth)

= (1.15 x 1.026) / (0.12 - 0.026)

= $12.55

Therefore, The dividend amount is determined by factors such as the insurance company's profits, investment performance, and the sum of money paid into the policy.

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The concept of​ in-groups and​ out-groups is an integral part of which leadership​ theory?.

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The concept of​ in-groups and​ out-groups is an integral part of the leader-member exchange​(LMX) theory.

leader–member trade (LMX) idea suggests that leaders and followers increase specific relationships based on their social exchanges, and the niceness of these exchanges within an employer can impact worker results.

LMX idea is the first-rate principle of management as in contrast to the other theories, it concentrates and talks about approximately specific relationships between the leader and every subordinate. LMX concept is a sturdy explanatory principle. LMX theory focuses our interest on the significance of verbal exchange in leadership.

foundation understanding. chief-member trade (LMX) advanced from the vertical dyad linkage (VDL) concept. added this precise management principle, which displays the vertical dyadic interplay among leaders and participants.

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according to porter's five-force model, the degree to which a firm relies on one or a few suppliers will influence its ability to negotiate good terms. true false

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A business analysis framework called Porter's Five Forces can help to understand why different industries are able to maintain varying levels of profitability.

What Are the Five Forces of Porter?An industry's vulnerabilities and strengths can be ascertained using Porter's Five Forces, a model that identifies and examines five competitive forces that affect every industry. The structure of an industry is typically identified using the Five Forces analysis to develop company strategy.Any sector of the economy can benefit from using Porter's model to better analyze industry rivalry and increase long-term profitability. After Michael E. Porter, a professor at Harvard Business School, the Five Forces concept was created.Porter's five forces are:There is conflict in the sector.Potential for new competitors to enter the marketInfluence of suppliersInfluence of consumersReplacement product risk.

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how would you defend intermediaries to someone who said that eliminating them would save consumers millions of dollars?

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The fact that marketing middlemen offer value far in excess of what they cost is why they have not been completely removed .

Market intermediates are organizations that are involved in the transaction of the product from the producer till the final customer purchases it. Market intermediaries can be either companies or individuals. At each stage, when future transit and inventory costs are imposed, the products are continuously changing who is in possession of them. Finally, the product is made a certain price at the retail store.

Although they present a challenge to businesses when they compete on price, intermediaries are essential since a large distribution network cannot be managed by a single company.

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from the guest presenter, elizabeth oates, director of consumer insights at ulta: approximately what percent of adults in the usa belong to at least 1 loyalty program?

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Loyalty/reward program describes the gifts, special offers, and other incentives that businesses give to their clients as part of a plan to keep them coming back for more of their goods or services.

When creating a successful loyalty/reward program, a business should take into account the following three factors:Exclusivity, since if everyone in the program receives the same perks, the client won’t see any value in the program, and they need to feel special to be a part of it.Customer knowledge: By understanding your audience, you can make sure that the program will speak to their wants and desires and be relevant to them.Contribution to the brand is necessary since you must ensure that your brand is supported by all of your activities.

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according to the capm, what is the market risk premium given an expected return on a security of 13.6%, a stock beta of 1.2, and a risk-free interest rate of 4%?

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The market risk premium is 8%

What is the market risk premium?The difference between the anticipated return on a market portfolio and the risk-free rate is known as the market risk premium.It offers a numerical assessment of the additional return that market participants seek in exchange for the elevated risk.The slope of the security market line (SML) connected to the CAPM (capital asset pricing model) represents the market risk premium.Compared to the equity risk premium, which only takes the stock market into account, the market risk premium is broader and more diverse. The equity risk premium is frequently larger as a result.

Calculation

Expected return on a security E(r) = 13.6%

Stock beta (b) = 1.2

Risk-free return R(f) = 4%

E(r) = risk-free return + stock beta * market risk premium

⇒ 13.6% = 4%+1.2* market risk premium

Therefore, market risk premium = 8%

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if interest rates decline, bondholders will earn . a. a higher current yield b. a higher maturity value on the maturity date c. no capital gain on the bond's maturity d. a lower rate of return on reinvested cash flows e. a lower coupon interest on the bond

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The total rate of return that a bondholder anticipates earning if the bond is held until maturity is referred to as YTM in the context of bonds.

A single Bond's YTM formula is as follows:[Annual Interest plus [(FV-Price)/Maturity]] / [(FV+Price)/2] is the yield to maturity.

What is YTM, or yield to maturity?

If a bond is held until its maturity, the expected total return is known as yield to maturity (YTM).A long-term bond yield, yield to maturity is expressed as an annual rate.To put it another way, it is the bond's internal rate of return (IRR) if the investor holds onto the bond until maturity and all payments are made on time and are reinvested at the same rate.

Respect development is likewise alluded to as "book yield" or "reclamation yield."

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Wireless Solutions reports operating expenses of $835,000. Operating expenses include both rent expense and salaries expense. Prepaid rent increases during the year by $15,000 and salaries payable increases by $12,500. What is the cash paid for operating expenses during the year? (List cash outflows and any decrease in cash as negative amounts. )

Answers

Cash Paid for operating expenses during the year $830,000

What are operating expenses?

Operating expenses are costs that a business incurs to maintain its core operations on a daily basis.

In the above case

Total Operating Expenses reported by Wireless Solutions = $835,000

Increase in Prepaid Rent means ---during the year company has paid amount for prepaid expenses.

Increase in Salaries Payable means the salaries are outstanding and payment was not made by the company.

Operating expenses reported by company $835,000

Add: Increase in Prepaid expenses $15,000Less: Increase in Salaries Payable ($20,000)

Cash Paid for operating expenses during the year $830,000

Hence, Cash Paid for operating expenses during the year $830,000

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what are some issues and risks that international packaging faces that are not present in a domestic shipment?

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The following are some obstacles and risks that international packing faces that are not present in domestic shipments.

Product damage, export delays, price increases, and the country's culture

What is the Damage to the product?

If you are exporting your goods to another country, the packaging must be strong enough to safeguard the contents within. Consider how you would feel if you ordered something from another country and it arrived damaged. Will you buy the same product from the same company again? As a result, the firm must guarantee that the packaging is sufficient to ensure that the product survives the extended travel.

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in comparative advertising, a company cannot be held liable for misrepresentations regarding products other than its own. group of answer choices true false

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'in comparative advertising, a company cannot be held liable for misrepresentations regarding products other than its own.

This statement is false.

Comparative or combat advertising is advertising that specifically mentions the name of a competitor for a particular product or service, clearly stating why the competitor is inferior to the product named after it. Comparative advertising is a marketing strategy that presents a company's products or services as superior to those of its competitors. Comparative advertising campaigns may include print direct comparisons of the features of one company's products to those of its competitors.

Comparative advertising is an advertising strategy used by brands to promote their products, making their products look better than those of their competitors. "Now eat without feeling guilty. Our burgers have 80% fewer calories than McDonald's. ” This message shows that the brand's products are superior.

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dawn wants to join a new gym. she has seen flyers campus that promote a new gym in town. dawn decides to use the one free pass presented on the flyer to try out the gym to see if it will meet her needs. what stage of the consumer adoption process does this represent?

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Product awareness, interest in the product, product evaluation, product testing, and product adoption are the five stages.

Consumers look for information about the product at this stage of the adoption process, which is known as the interest (information-gathering stage). Evaluation (step of consideration): The consumer chooses whether or not to try the new product at this point in the process. The process of consumer adoption begins with the product awareness stage. It describes the time when a potential consumer first learns about your good or service and begins to think about buying it. It's time to formally register your interest in becoming an adoptive parent and go through the first round of checks, now referred to as Stage One, once you have found an agency that you feel comfortable with.

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mona is a licensee who strives to be professional in all of her actions, so how does she keep her business account?

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According to rules governing the practice of licensee, Mona would keep her business account by acquiring a valid license, received from the legal authority, to lawfully operate or do business in a certain area or location.

Who is a Licensee?

A Licensee is a term that is used in real estate to describe a person that has been assigned limited permission to use or occupy a property whether physical or intellectual property.

As a licensee who strives to be professional in all of her actions, Mona is expected to keep her business account by doing the following:Establish a business name operating licensee workHave the financial strength to prove to the licensor that the licensee is capable to carry out the operationQuality and compliance with the necessary regulating authority

Hence, in this case, it is concluded that the correct answer is to have "a valid license, received from the legal authority, to lawfully operate or do business in a certain area or location."

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During the coronavirus pandemic in 2020, demand for frozen pizza almost doubled without price changes for these products. Economists call this.

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Due to significant shifts in demand and bottlenecks in farm labour, processing, transport, and logistics, the COVID-19 pandemic has put unprecedented strain on the food supply chains.

The majority of these disruptions are the result of measures taken to stop the virus's spread. Despite these stresses, food supply chains have shown remarkable resilience. As stockpiling behaviour decreased and supply chains adjusted to rising demand, grocery store shelves were restocked over time. Long lines at borders quickly disappeared as a result of policies that reduced pointless restrictions. Although the effects of COVID-19 are still being felt, experience to date demonstrates the value of an environment for open and predictable global trade to ensure that food can get where it is needed.

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a city accounts for its capital acquisitions using encumbrances. when the city enters into a contract to acquire equipment, what journal entry should it make

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A city accounts for its capital acquisitions using encumbrances. when the city enters into a contract to acquire equipment, Debit encumbrances: Credit budgetary fund balance reserved for encumbrances.

Acquisition of capital means the acquisition of assets, stock purchases, mergers, or other forms of investment by a group member for the purpose of long-term means a controlling transaction.

An acquisition is a transaction in which one company acquires and controls another company. These transactions are a central part of Mergers and Acquisitions (M&A), a corporate legal or financial career path focused on acquisitions, divestitures, and business integration.

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the balance in accounts receivable at the beginning of the year amounted to $2,960. during the year, $9,800 of credit sales were made to customers. if the ending balance in accounts receivable amounted to $1,960, and uncollectible accounts expense amounted to $820, what is the amount of cash inflow from customers that would appear in the operating activities section of the cash flow statement? multiple choice $9,980 incorrect $9,800 $12,760 none of these answers are correct.

Answers

$9980 is the amount of cash inflow from customers that would appear in the operating activities section of the cash flow statement.

Sales Revenue + Beginning Accounts receivable = Total Receivable  

Total Receivables - (Ending Accounts receivable + Uncollectable account) = Total cash collected from Accounts receivables

You can do it this way:

Add up sales and beginning receivables which will give you total receivables. then add up ending receivables and uncollectible account and reduce it from total receivables computed earlier

Ultimately it will give you Total cash collected from Accounts receivables.

Sales Revenue + Beginning Accounts receivable will give you the total Receivable.

 

$9,800+ $2,960= $12,760

Total Receivables - (Ending Accounts receivable + Uncollectible account) = Total cash collected from Accounts receivables.

$12,760-( $1,960+ $820)=  $9980

$9980 is the total cash collected from Accounts receivables.

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question what is not a specific goal of u.s. economic policy? responses freedom freedom increased importation increased importation security security growth growth

Answers

The US economic policy does not specifically aim to promote entrepreneurship.

Explain about the Entrepreneurship?

The process of starting, setting up, and operating a new company in order to make money while taking on financial risk is known as entrepreneurship.

A person who spots a need in the market and works to fill it is called an entrepreneur. The word has historically been used to describe a person who begins a business because they sense an economic opportunity in being able to meet a specified need.

An example of a small company enterprise might be a restaurant with only one location, a single grocery store, or a retail store where you may sell your handcrafted goods. These people typically invest their own money and are successful if their firm makes a profit, which they use to support themselves.

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a decrease in interest rates will question 30 options: 1) be a movement along the investment function relating planned investment to the interest rate. 2) shift the investment function relating planned investment to the interest rate to the right. 3) shift the investment function relating planned investment to the interest rate to the left. 4) have no impact on the investment function relating planned investment to the interest rate.

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The ratio of total direct investment to goods produced is known as the investment rate in business statistics. The factors that affect the levels of total investments

What is Investment Function ?

A concept or method used in economics known as the "investment function" aims to explain how changes in national income are related to the investment trends that exist within a given country's economy.

An investment is a purchase undertaken with the hope of earning money or increasing capital. The phrase "appreciation" refers to a rise in an asset's worth  When someone purchases something, they do not intend to use it for direct consumption, but rather  as a tool for generating wealth in the future.

Creating an investment entails using money now in the hopes that it will appreciate later. An investment is the use of capital—such as time, money, effort, etc.—with the expectation of earning a return greater than the initial investment. Any method or tool used to produce future income is referred to as an investment, including bonds, equities, real estate, and alternative investments.

Investments typically don't guarantee an increase in value; you can finish up with less money than you started with, Highly diversified investments can lower risk, but doing so may also lower income potential.

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an unscrupulous creditor might sell the right to collect the same debt to two different persons by assigning it to each of them. which one of the two innocent assignees is entitled to payment and why? (2 marks)

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An assignable contract is a derivative contract that contains a clause allowing the holder to transfer the obligations and rights of the contract to another party or individual before the contract expires.

In the real estate market, there are also assignable contracts that permit the transfer of property.

An assignable contract is one that contains a clause allowing the contract's holder to assign, transfer, or otherwise dispose of the contract's obligations and rights to another party or individual before the contract's expiration date. The underlying asset would be available for delivery, and the assignee would be eligible to take advantage of all contract benefits prior to their expiration. However, any responsibilities or demands imposed by the contract must also be met by the assignee.Some options and futures contracts may have assignability. Additionally, real estate contracts that are assignable permit the transfer of property.

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if i high tech firm wanted to set up operations in iran, what steps could it take to ensure that the subsidiary would not be expropriated? identify and describe three strategies that would be particularly helpful. how can you approach potential future changes in the political environment strategically? (ch.10)

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This can entail finding a partner that depends on the parent company for crucial aspects of the business, like funding, research, and technology, so that there is no real motivation to keep the partner.

The company could, for example, find some Iranian allies in the area. The government would see the company more favorably as a result.

Additionally, by limiting the use of advanced technology, the company could make it less profitable for the Iranian government to seize its assets (since they would not have the option to copy any significant cutting edge advancements). The company may now create dependencies at last.

Project dependencies deal with managing and scheduling project tasks while taking their sequences and requirements into consideration. Task B will be referred to as dependent on Task A if it is necessary for Task A to be completed. This may seem easy now, but things can get complicated in projects with many interconnected tasks.

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with an interest of $24.31 and a principal of $3,500 for 100 days, using the ordinary interest method, the rate is: multiple choice 2.5% 25% 2.3% 23% none of these

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ordinary interest calculated on a 360-day timeframe as opposed to a 365-day period. None of these are ordinary interest method.

Explain about the ordinary interest method?

Simple (regular) interest, accumulated interest, and compound interest are the three different kinds of interest.

The calculation of ordinary interest uses the premise that there are thirty days in each month of the year. This results in a situation where the interest rate is applied based on 360 days.

While some banks don't employ the strategy for all loans, a sizable portion of institutions use ordinary simple interest in each of the survey's loan categories.

Most interest is often subject to federal taxation at the same rate as your taxable income, including: Deposit account interest, such as that on checking and savings accounts.

$3500 x 24.31 x 100/360 = $23,934.72

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which statement is true of markup pricing? multiple choice it is not very effective at maximizing profits. it is one of the least used pricing tactics. it involves pricing a product higher than competitors in order to promote an image of superior quality. it is the most difficult of the pricing tactics to implement. it is estimated by adding a certain amount to the profit of a product to set the final price.

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The statement true to markup pricing is It is estimated by adding a certain amount to the profit of a product to set the final price.

What is markup pricing ?The term "markup pricing" describes the discrepancy between an item's retail price and the cost to create and market it for sale. The markup is typically specified as a fixed percentage, and it is calculated by adding that  to the item's real cost.You must factor in the particular expenses of exporting goods, such as transportation, customs tariffs, or intermediary margins, when determining markup pricing in international trade.The precise markup a company uses will vary based on its requirements, its type of business, and the sector it operates in. While some industries can afford to mark up their products and services by a relatively small percentage, others can afford to mark them up by a very large amount.

Although they both aid in the analysis of the same transaction, markups and profit margins give you access to different kinds of data. A profit margin is the difference between revenue and cost of goods sold, expressed as a percentage of revenue.

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the 2008 act that includes some regulations on the resale of goods is the: group of answer choices consumer product safety act. consumer product resale safety act. consumer product safety improvement act. consumer product resellers inclusion act.

Answers

The answer to the given question is Consumer Product Safety Improvement Act.

What is Consumer Product Safety Improvement Act?

The Consumer Product Safety Improvement Act (CPSIA) is an act to authorize consumer product safety standards and other safety concerns for children's products and to re-establish and develop the Consumer Product Safety Commission. The Act was signed into law on August 14, 2008. CPSIA makes consumer products safer by compelling that toys and infant products be tested to compulsory standards before they are sold.

The Consumer Product Safety Improvement Act (CPSIA) imposes new testing and documentation requirements, and regulates new acceptable levels of certain substances on producers of shoes, apparel, accessories and jewelry, personal care products, bedding, home furnishings, electronics and video games, toys, books, educational materials, school supplies and science kits. The Consumer Product Safety Improvement Act (CPSIA) also rises fines and states jail time for some offenses.

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edward is a partner in ens, ltd. the partnership generated a loss during the current year. edward's share of the loss was $7,000. how should edward handle the loss

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Edward handle the loss of $7,000 for AGI.

How do find AGI?The total amount of revenue and earnings earned throughout the tax year, less certain adjustments to income, is known as adjusted gross income (AGI). Your AGI is shown on Line 11 of Forms 1040, 1040-SR, and 1040NR for tax year 2022. On older forms, it can be found on various lines.Gross income less adjustments to income is known as adjusted gross income (AGI). Your salary, dividends, capital gains, company revenue, retirement payouts, and other sources of income are all included in your gross income.It is used to determine taxable income, which is determined by subtracting itemized deductions and personal exemptions from AGI.

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which activity takes place once the design of the promotional program is complete? multiple choice question. generate promotion ideas set the promotion schedule execute the promotion set the promotion budget

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Executing the promotion takes place once the design of the promotional program is completed.

There are a few key ways to maximise a promotional budget:

1. Set clear objectives and goals for the promotion. This will help to focus the budget and ensure that money is being spent in the most effective way possible.

2. Research the target audience thoroughly. This will help to identify the most effective channels and methods for reaching them.

3. Use data and analytics to track the results of the promotion. This will help to optimise the budget and ensure that the most successful elements are repeated in future promotions.

4. Keep a close eye on costs. This includes both the cost of the promotion itself and any associated costs such as production, shipping, and so on.

5. Leverage discounts and design deals. This can help to stretch the budget further and get more bang for your buck.

6. Be creative. Think outside the box to come up with unique and attention-grabbing ideas that will get people talking.

7. Plan ahead. The sooner you start planning the promotion, the more time you’ll have to find ways to save money.

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gerontographics is one segmentation approach to the mature market that incorporates aging processes and life events to the physical health and mental outlook of older consumers. true false

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Gerontographics is one segmentation approach to the mature market that incorporates aging processes and life events to the physical health and mental outlook of older consumers.The given statement is True.

Market segmentation is a marketing concept that describes grouping potential customers into segments or groups with comparable demands and responses to marketing actions. Companies can target various consumer groups using market segmentation who view the full value of particular goods and services in different ways. With the use of market segmentation, companies may target certain consumer segments and create products and branding that appeal to them.

Multiple market segmentation techniques exist, including geographic, demographic, and behavioural segmentation.

Market segmentation assists businesses in reducing risk by identifying the items that are most likely to capture a portion of a target market and the most effective strategies for marketing and distributing those products to that market.

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suppose a consumer is currently spending all of her available income on two goods: music cds and dvds. if the price of a cd is $9, the price of a dvd is $18, and she is currently consuming 10 cds and 5 dvds, what is the consumer's income?

Answers

The consumer's income is $180

Income is the money that an individual or organization receives in return for their services or goods. Depending on the context—such as taxation, financial accounting, or economic analysis—income may have a variety of definitions. For the majority of people, their total earnings include their wages and salaries, investment returns, pension payments, and other receipts. For businesses, income refers to the money made from selling goods and services as well as any interest or dividends paid on the company's cash holdings and reserves.

Price of cd = $9

Number of cd purchased = 10

Total money spent on CDs = 9*10 = $90

Price of DVD = $18

Number of DVD purchased = 5

Total money spent on dvd = 18*5 = $90

Total income = Money spent on dvd + Money spent on cd

= 90 + 90 = $180

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after two weeks of looking and comparing alternatives for a laptop, julie finally bought a macbook. for days following the purchase, she kept pondering if she should have purchased a different brand. what is julie experiencing in this scenario?

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Julie is experiencing buyer's remorse in this condition.

What is buyer's remorse?Having regret or anxiety after making a purchase is known as "buyer's remorse." Also known as buyer's remorse or buyer's disappointment, it results from the conviction that the purchase was a mistake, either because there was a better option available or the selection was just incorrect.Buyer's remorse can happen after any kind of purchase, but it typically happens after making a big commitment, like purchasing a home or a car.Buyer's regret is supposed to result from cognitive dissonance, specifically post-decision dissonance, which happens when a person must choose between two equally alluring options, like a large investment buy. Resources invested, the buyer's engagement, whether the purchase is compatible with the buyer's aims, and regret-inducing thoughts experienced after the purchase are some factors that can influence buyer's remorse.

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suppose that you deposit $8,000 in your bank and the required reserve ratio is 15 percent. the maximum loan your bank can make as a direct result of your deposit is:

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Find the total amount of deposits. Examine all of the reserves. The reserve ratio is calculated by dividing the reserves by the total deposits.

To more readily grasp the idea, consider a nation where the national bank forces a 15% hold prerequisite.1/15 is the reserve ratio; It means that the bank can lend $0.85 out of every $1 deposit. As a result, if a bank has $200 million in deposits, it can lend $170 million.

What is the current CRR ratio and CRR?

The portion of a bank's total deposit that must be held as liquid cash reserves by the Reserve Bank of India (RBI) is known as the Cash Reserve Ratio (CRR).Learn more about SLR and Repo Rate by clicking here. The cash reserve ratio, which stands at 4% at the moment, will rise to 4.5 percent on May 21.

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he risk premium measures: multiple choice 1 the total interest rate paid on a financial asset. the interest paid on a u.s. government bond. the extra interest paid on a risky financial asset. the rate at which people default on their debts.

Answers

The risk premium measures the difference between the expected return on a market portfolio and the risk-free rate.

What's risk premium applied for?

A risk premium is the investment return an asset is anticipated to yield in excess of the threat-free rate of return. An asset's risk premium is a form of compensation for investors. It represents payment to investors for permitting the redundant threat in a given investment over that of a threat-free agent.

What's a risk premium?

A risk premium is the advanced rate of return you can anticipate to earn from unsafe means like stocks, rather of investing in a risk-free means like government bonds.

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