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What is a period of rising prices called?
inflation
What risk refers to danger of lost buying power during times of rising prices?
Inflation
How would the security market line shift if inflation decreased and investors became more risk adverse?
it will shift up, the slope will remain the same
What is the effect of a raise in discount rates?
Discount rate = inflation expectation + risk premium for the investment, so when inflation goes up, your discount rate should go up
What factors primarily determine the risk-free interest rate?
The risk-free interest rate is primarily determined by factors such as inflation, economic conditions, central bank policies, and market demand for safe investments.
What is the risk of a money market account?
The biggest risk is that the interest you earn will not keep up with inflation.
What is a period of rising prices called?
inflation
What are the disadvantages of bonds?
To have a bond is to loan money to the issuing corporation. Some risk may occur in having bonds. These are the Inflation risk, liquidity risk and the lower returns.
What risk is associated with a us corporate bond?
Many the main risk is to default , but also important is inflation, maturity, credit ratings and more..
Whats the example of price risk?
exchange rate, interest rate, oil price, and inflation risk are all examples of financial risks.
What risk refers to danger of lost buying power during times of rising prices?
Inflation
What should you do to minimize the risk of gastric inflation?
give breathes until you see the chest rise
What has the author Morgan J Lynge written?
Morgan J. Lynge has written: 'Inflation and the household liquid asset portfolio' -- subject(s): Inflation (Finance), Investments 'An analysis of business risk in commercial banking' -- subject(s): Banks and banking, Risk
Which investment option is not subject to purchasing power risk?
Investment options such as Treasury Inflation-Protected Securities (TIPS) are not subject to purchasing power risk because they are designed to protect against inflation by adjusting their value based on changes in the Consumer Price Index.
How do you calculate market risk premium for a firm?
Risk premium = Company's risk (standard deviation of the historical stock returns of the market as a whole) - Risk-free rate of return (standard deviation of the historical treasury bonds' returns) - Inflation
What is the ful form of tips?
The full form of TIPS is Treasury Inflation-Protected Securities. These are low-risk investments that are designed to protect against inflation by adjusting their value based on the Consumer Price Index.
What has the author William Oliver Coleman written?
William Oliver Coleman has written: 'Economics and Its Enemies' 'The causes, costs and compensations of inflation' -- subject(s): Money, Inflation (Finance), Quantity theory of money, Risk
