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The real risk-free rate of interest, r∗, is 3%; and it is expected to remain constant over time. Inflation is expected to be 2% per year for the next 3 years and 4% per year for the next 5 years. The maturity risk premium is equal to 0.1×(t−1)%, where t= the bond's maturity. The default risk premium for a BBB-rated bond is 1.3%.
What is the yield on a 4-year BBB-rated corporate bond with a liquidity premium of 0.5% ?
You’re struggling in your new accounting practice to tap into a potential client base. You have tried traditional advertising and marketing tools to no avail. Your friend tells you to use social media as a tool to reach potential customers. You’re not sure about it. Your concern is one of ethics. The last thing you want to do is violate the ethical standards of the accounting profession. Identify the ethical issues that should be of concern to you in deciding whether and how to use social media for advertising and solicitation of new clients.
Use these terms to complete the statement below.
Bank reconciliationCash equivalentsControllerDeposits in transitFidelity bondFirewallFraud triangleFraudulent financial reportingImprest systemInternal controlMisappropriation of assetsOutstanding checkPhishingRemittance adviceTreasurer
- Investments such as time deposits and certificates of deposit are _______________.