--%>
Assignment Help - homework help

Inflation premium

Describe the term Inflation premium and how it is the prospect of future inflation?

E

Expert

Verified

Inflation premium: It is the prospect of future inflation, very strongly affects the shape of the term structure. Investors thinking regarding loaning money for different lengths of time recognize that future inflation erodes the value of dollars which will be returned. As an outcome, investors demand compensation for such loss in the form of maximum nominal rates. This extra compensation is termed as inflation premium.

   Related Questions in Microeconomics

  • Q : Long run equilibrium for purely

    When a purely competitive industry is into long run equilibrium, in that case for the typical firm: (a) P = FC = TC = MC = MR = AR = AC. (b) P = AR = MR = SRMC = SRAC = LRMC = LRAC. (c) pure economic profits reward especially effectiv

    		•
  • Q : System of Note-issue Name the System of

    Name the System of Note-issue in India. Answer: In India, the system of note-issue is the Minimum Reserve System. The RBI is needed to keep minimum reserves of Rs 2

    		•
  • Q : Marginal revenue product problem

    Siberian Software vends custom programs to the multinational corporations. Its programs are coded in a remote region. In equilibrium, the Siberian’s programmers produce a marginal revenue product equivalent to around: (i) $21 per hour. (ii) $25 per hour. (iii) $

    		•
  • Q : Problem based on ATC-MR and MC If $4 is

    If $4 is Firm B's profit-maximizing price, its: A) ATC must be $4. B) MC must be $4. C) MR must be $4.  D) MC must be zero. Help me to get

    		•
  • Q : Non-discriminating firm through

    The non-discriminating organization with monopsony power in the labor market confronts the: (i) Wage rate which consistently surpasses the marginal revenue. (ii) MRP less than w. (iii) MFC which surpasses w. (iv) Monopolistic seller of the organization’s output.

    		•
  • Q : Split roughly burden of tax The burden

    The burden of an excise (i.e., per unit) tax would be divide roughly fifty by fifty on consumers and suppliers of the taxed good within: (w) Panel A. (x) Panel B. (y) Panel C. (z) Panel D.

  • Q : Objectives of Microeconomic policy

    Widely accepted objectives for microeconomic policy comprise: (w) full employment. (x) general price stability. (y) economic development. (z) efficiency, freedom and equity. Hey friends please give your opinion for

    		•
  • Q : Process of Capitalization

    Capitalization is a process: (a) that converts fixed cost into variable cost. (b) by which predictable income flows are translated into wealth. (c) of financial intermediation by bankers. (d) of exploiting unskilled workers.

    Q : Measurement of price cross-elasticity

    Price cross-elasticity of demand measures the virtual responsiveness of the quantity sold of a specified good to a change in the: (w) price of which good. (x) individual's income. (y) sales of another good. (z) price of another good.

    Q : Expectations in market demands for

    Present market demands for most of the durable goods tend to rise if: (1) Their prices are predicted to rise in the near future. (2) Consumers expect growth in supplies of substitutes. (3) Technological advances make present models obsolete. (4) The p

    		•