100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
D076 Module 4 REVIEW A+ $12.99   Add to cart
Quickly navigate to
Preview
  2.  
  3. WGU
  4.  
  5. WGU

Exam (elaborations)

D076 Module 4 REVIEW A+
 0 view  0 purchase
  • Course
  • WGU
  • Institution
  • WGU

3 components of interest rate, or required rate - opportunity cost, risk, and inflation 3 different names used for interest rate - discount rate, required rate, cost 9f capital compound interest - interest earned on both the principal amount and any interest already earned Inflation - is the rat...

[Show more]

Preview 1 out of 2  pages

Document information

  • February 2, 2024
  • 2
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers

Subjects

  • d076 module 4 review a

Written for

  • WGU
All documents for this subject (6253)

Seller

avatar-seller
dennisgathiru

Reviews received

Content preview

D076 Module 4 REVIEW A+
3 components of interest rate, or required rate - ✔✔opportunity cost, risk, and inflation



3 different names used for interest rate - ✔✔discount rate, required rate, cost 9f capital



compound interest - ✔✔interest earned on both the principal amount and any interest already earned



Inflation - ✔✔is the rate at which the average price level of goods and services increases



Interest rate is also called - ✔✔required rate of return when it refers to the compensation that an
investor or lender will accept for investments such as stocks, bonds, or loans



opportunity cost - ✔✔is the loss of potential gain



Risk - ✔✔is the possibility that the actual return will differ from the expected return



simple interest - ✔✔interest paid on the principal alone



Suppose Sophia is considering a new stock investment for her retirement account. This stock has
significant risk, but is quite popular in the market. Inflation for the next few years is expected to be 2-3%
per year, and the current U.S. Treasury rates are about 2%. How should she use this information to
decide what type of return she can expect from the stock? - ✔✔Based on the inflation rate, she should
expect this stock to provide a return higher than this for the associated risk.



What does the risk-free rate indicate? - ✔✔Inflation and opportunity cost

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller dennisgathiru. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $12.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

79271 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$12.99
  • (0)
  Add to cart