Leigh Brown is attempting to find the nominal rate of interest for a security. S

Question

Leigh Brown is attempting to find the nominal rate of interest for a security. She gathered the following
information:   

characteristics

16.) If the real rate of interest is currently 2.5%, what is the risk-free rate of interest applicable to the
security?
a. 2.5%
b. 4.2%
c. 8.5%
d. 10.2%

17.) What is the total risk premium attributable to the security

characteristics

security time to maturity 9 years Consumer Price Index ("CPI") 1.7% risk premiums default risk 2.5% liquidity risk 1.4% maturity risk 4.6%

Explanation / Answer

16.b. 4.2%

17.a. 11.0%

18.d. 12.7%

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.