Answer: Lower the price because demand for the good is elastic.
Explanation:
The good is elastic because the elasticity is more than 1. What this means is that when the price of the good is reduced by 1%, the demand of the good will increase by 3.5%.
If the company wishes to raise revenue therefore they should reduce their prices because more people would then buy the goods and the number of more sales would lead to higher revenue.
Answer:
A zero coupon bond:
A. is sold at a large premium.
B. has a price equal to the future value of the face amount given a positive rate of return.
C. can only be issued by the U.S. Treasury.
D. has less interest rate risk than a comparable coupon bond.
E. has a market price that is computed using semiannual compounding of interest.
Answer is : B
Explanation:
In classification of bonds we have a unique type of bond known as Zero-coupon bonds also know as Pure discount bonds, unlike traditional bonds they don’t pay coupon instead they are sold on discount basis and on maturity the bondholder receive a par value, for this reason the price will be at a discount on sale and on maturity be redeemed at par price showing a positive rate of return.
Answer:
The money multiplier of the economy is 20
Explanation:
Money multiplier is the term of economics which is defined as the maximum amount, the money supply could rise grounded on the increase in the reserve in the system of banking.
The formula used for computing the money multiplier is as:
Money Multiplier = 1 / r
where
r is the reserve ratio that is 5%
So, putting the same value above:
Money Multiplier = 1 / 5%
Money Multiplier = 20
Answer:
B) It would decrease
Explanation:
Suppose that Company XYZ assets before the sale of assets were $2,000,000 and is total debts were $1,500,000. The debt to asset ratio before the sale of assets were:
Debt/Asset ratio=$1,500,000/$2,000,000=0.75
Now the Company XYZ has decided to sell the the assets worth $1,000,000 to pay Debts so the assets now will become $1,000,0000 while the Debts now will become $500,000 and accordingly the debt to asset ratio will be calculated as follows:
Debt/Asset ratio=$500,000/1,000,000=0.50
So based on the above discussion, the answer shall be B) It would decrease
Answer:
c)$568; $378; $54
Explanation:
($1,120 - $1,000)/$1,000 = 12%
(0.6)14% + (0.4)10% = 12.4%
12% = w5% + 12.4%(1 - w)
w = .054
1-w = .946
w = 0.054($1,000)
= $54 (T-bills)
1 - w = 1 - 0.054 = 0.946
0.946($1,000) = $946
$946 x 0.6 = $568 in X
$946 x 0.4 = $378 in Y.
