A corporation

must use the same depreciation method for tax and financial reporting purposes.

must use different depreciation methods for tax and financial reporting purposes.

may use different depreciation methods for tax and financial reporting purposes.

must use different (than for tax purposes), but strictly mandated, depreciation methods for financial reporting purposes.

Nico Nelson, a management trainee at a large New York-based bank is trying to estimate the real rate of return expected by investors. He notes that the 3-month T-bill currently yields 3 percent and has decided to use the consumer price index as a proxy for expected inflation. What is the estimated real rate of interest if the CPI is currently 2 percent?

5%

1%

3%

2%

Government usually

is a net supplier of funds.

is a net demander of funds.

borrows funds directly from financial institutions.

maintains permanent deposits with financial institutions.