Answer:
$9
Explanation:
Calculation for how much the common shares of FYZ are trading
First step is to find the conversion ratio
Using this formula
Conversion ratio =Market price of the convertible+Conversion price)/Conversion price
Let plug in the formula
Conversion ratio=$70/$10
Conversion ratio=7
Second step is to calculate for the Parity price of the common stock
Using this formula
Parity price=Market price of the convertible / conversion ratio
Let plug in the formula
Parity price=$70/7
Parity price=$10
Last step is to calculate how much the common shares of FYZ are trading
Using this formula
Common shares =Parity price-Common stock trading point
Let plug in the formula
Common shares =$10-1
Common shares=$9
Therefore the common shares of FYZ are trading at $9
Result of active fiscal policy : there may be stimulation of the economy in the short run, but there will be harmful effects to the economy in the long run.
Explanation:
Active fiscal policy implies that Congress and the President are actively attempting to shift the trajectory of the economy by adjustments in taxes and/or government expenditure.
In an open market, monetary policy often influences the rate of exchange and trade balance.
Moreover, in the long term, the development of international debt, which stems from large government expenditures, can lead investors to mistrust US assets which may trigger the exchange rate to fall.
<span> The term budget constraint denotes the consumption limitation because of a certain income.</span><span>
The slope of the budget constraint is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.
</span><span>The concept of budget constraint is used to analyze consumer choices. </span>
