You Read in the Financial Mail That 30-Day T-Bills Currently

question 29

Multiple Choice

You read in The Financial Mail that 30-day T-bills currently are yielding 8 percent.Your brother-in-law, a broker at Khumalo Securities, has given you the following estimates of current interest rate premiums: Based on these data, the real risk-free rate of return is

• A) 0%
• B) 1%
• C) 2%
• D) 3%
• E) 4%

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Definitions:

Positive Correlation Condition

A condition where two variables increase or decrease in parallel, indicating a direct relationship between them.

Placebo Effect

A psychological phenomenon where patients experience real improvements in their condition after receiving a treatment with no therapeutic value, simply because they believe it is effective.

Participants' Expectations

Refers to the beliefs or assumptions held by individuals participating in a study about what will happen to them or what they are supposed to do, which can influence the outcomes of research.

Single-blind Study

A research experimental design in which the participants do not know which group (experimental or control) they are in, to prevent bias, while the researchers do.