Assume the following:·The real risk-free rate of return is 3%.·The expected inflation premium is 5%.·The market-determined interest rate of a security is 12%.The sum of the default risk premium, liquidity premium, and maturity premium for the security isclosestto:
A: 10%.
B: 4%.
C: 8%.
A: 10%.
B: 4%.
C: 8%.
举一反三
- Suppose that the risk-free rate is 5%, risky asset weight (the y) is 50% and market risk premium on risky asset is 5%, what is the expected portfolio return of our portfolio? Write in percentages with the % symbol.______
- Suppose that the risk-free rate is 5%, risky asset weight (the y) is 50% and market risk premium on risky asset is 5%, what is the expected portfolio return of our portfolio? Write in percentages with the % symbol.<br/>______
- Assume the following data: Risk-free rate = 4.0 percent; average risk premium = 7.7 percent. Calculate the required rate of return for the risky asset. A: 5.6 percent B: 7.6 percent C: 11.7 percent D: 30.8 percent
- A risk premium is the additional return expected for taking on risk.
- (I) The risk premium widens as the default risk on corporate bonds increases. (II) The risk premium widens as corporate bonds become less liquid.