Risk-free interest is the rate of interest which exists when the expected risk of the economic transaction is zero. In most cases, the general interest rates in major banks of a country reflects the...
The risk free rate has to meet two criteria:
(1) there can be no risk of default associated with its cash flows and
(2) there can be no reinvestment risk
Using these conditions, the appropriate...
Rate= Interest/Principle x Time.For Example....Camilla borrowed $2000,(That's the principle),the interest is $4,000 her year was 3, and it was 4% each year,(.04)Explanation....$2000 x 3 =...