The Long Term Inflation Rate Average Was 3

question 53

Multiple Choice

The long term inflation rate average was 3.2% and you invested in long term corporate bonds over the same period which earned 6.1%.What was the average risk premium you earned?

• A)2.9%
• B)3.1%
• C)9.3%
• D)9.4%
• E)None of the above.

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Definitions:

Cash Collections

The total amount of money received by a company from its various sources, including sales, during a specific period.

Selling Price

The amount for which something is sold, establishing the revenue a company receives from the sale of a product or service.

Direct Materials Budget

A financial plan that estimates the raw materials required for production and the associated costs based on forecasted sales.

Raw Materials

The basic, unprocessed elements or ingredients used in the manufacturing process to create finished goods.