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Cost of Capital for Government securities is also known as: ?

<p style="text-align:justify;"><span>(<strong>a) Risk-free Rate of Interest,</strong></span></p> <p style="text-align:justify;"><strong><span>(b) Maximum Rate of Return,</span></strong></p> <p style="text-align:justify;"><strong><span>(c) Rate of Interest on Fixed Deposits,</span></strong></p> <p style="text-align:justify;"><span><strong>(d) None of the above.. </strong></span></p>

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Question ajoutée par VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.
Date de publication: 2014/09/20
Vipul Vaidya
par Vipul Vaidya , Group Commercial & Finance Controller , AlMansoori Petroleum Services

(a)

Shamel Rashad, CMA
par Shamel Rashad, CMA , Advisor to the Chairman on Financial Control , Bavaria Egypt

A. Risk Free Rate.

 

I'd like to add this is only for governments issuing securities in their own currency. The rule is that Governments do not default on their own currencies.

 

A higher interest rate on local currency is usually an indication of expected currency devaluation by investors who lend the Government.

 

However, if we take Governments borrowing Foreign Currencies, this is no longer the risk free rate, as the risk of default does exist.

 

 

Ahmed Abd Alwahab Awad Ibrahim
par Ahmed Abd Alwahab Awad Ibrahim , Chief Accounting , ICCDP

a) Risk-free Rate of Interest,

Sara Khan
par Sara Khan , financial and admin assistant , Ministry Of Defence

option A) Risk free rate of return.

Thaikkattil Mathew Joshi
par Thaikkattil Mathew Joshi , Group Credit Controller , Gps Group,Dubai.

A .Of Course, Risk  Free rate of interest

 

Regards,

Joshi Mathew

CIA #1036906

 

georgei assi
par georgei assi , مدير حسابات , المجموعة السورية

Answer A correct answer

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