Answer:
It is used by Fed to manage the economy by increasing or decreasing the amount of loans being made
Explanation:
The Fed decides on required reserve ratio for the banks and other financial institutions; t can lower or raise it. Reserve ratio is the portion of all the money that bank are required to sets aside and hold onto; this means they are not allowed to lend that out to borrowers. This is a technique that is used to control the supply of money in the economy. By decreasing this ratio, banks will have more money to lend out and vice versa.
Based on the fact that the Euro will appreciate, the best thing for Johnson Co. to do is to e.purchase euros forward.
<h3>What should Johnson Co. do?</h3>
The fact that the Euro is going to appreciate in value means that Johnson Co. will have to pay more in future.
They should therefore lock in a favorable Euro rate now by purchasing Euros at a forward rate.
Find out more on purchasing forward at brainly.com/question/14090802.
#SPJ12
Answer:
(a) 7.5%
(b) 8.5%
(c) 9.5%
Explanation:
(a) Foreign country inflation rate - US inflation rate = Foreign country risk free rate - US risk free rate
Lets foreign country inflation rate = X
X - 1.5 = 8 - 2
X - 1.5 = 6
X = 6 + 1.5
= 7.5%
(b)
Lets foreign country infllation rate = X
X - 1.5 = 9 - 2
X - 1.5 = 7
X = 7 + 1.5
= 8.5%
(c)
Lets foreign country inflation rate = X
X - 1.5 = 10 - 2
X - 1.5 = 8
X = 7 + 1.5
= 9.5%
<span>The answer to this
question is “TRUE”. A bond is just like a loan. However, the main difference is
that with loans, the public is borrowing money from a bank or lending source.
With Bonds, the company borrows money from the public. Both have interest rates
and payment due based on the terms of agreement.</span>
Answer:
0.25
Explanation:
Given the following outcomes,
- Outcome 1: probability (P) = 0.25, return (R) = 0.10
- Outcome 2: P = 0.50, R = 0.25
- Outcome 3: P = 0.25, R = 0.40
The expected return on the investment
= 
= (0.25 * 0.10) + (0.50 * 0.25) + (0.25 * 0.40)
= 0.025 +0.125 + 0.100
Expected return = 0.25.
