Answer:
An employee has an average wage of $60,000 and has worked for the firm for 28 years. The defined benefit pension plan pays retirees 2.3% of the average wage times the years of service. The employee can expect to receive __$1,380_____ per year upon retirement.
Explanation:
a) Data and Calculations:
Average wage = $60,000
Number of years worked in the firm = 28 years
Defined benefit pension plan rate = 2.3%
Annual defined benefit pension plan = $1,380 ($60,000 * 2.3%)
Total benefit to be received = $38,640 ($1,380*28) or ($60,000 *28 * 2.3%).
b) This employee is expected to receive the total benefit of $38,640 for serving the firm for 28 long years under the defined pension plan, given the plan rate of 2.3% of the average wage.
American Paper Company has a beta of 1.2. The risk-free rate is 6 percent and the required return on the market is 14 percent. The required rate of return on the security is:
<h3>What Is the Security Market Line?</h3>
The security market line (SML) is a line drawn on a chart that serves as a graphical representation of the capital asset pricing model (CAPM)—which shows different levels of systematic, or market risk, of various marketable securities, plotted against the expected return of the entire market at any given time.
Its Also known as the "characteristic line," the SML is a visualization of the CAPM, where the x-axis of the chart represents risk (in terms of beta), and the y-axis of the chart represents expected return. The market risk premium of a given security is determined by where it is plotted on the chart relative to the SML
The formula for plotting the SML is:
Required return = risk-free rate of return + beta (market return - risk-free rate of return)
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Currency exchange rates based on many different factors. These factors are interest rates, inflation, public debt, deficits, terms of trade and political stability or the economic performance. Due to the many factors that affects currency exchange rate, it is almost impossible to predict where it is heading.
Answer:
A monopsony is market where there is only one buyer, e.g. the government is the sole buyer for nuclear submarines in the US.
The demand curve of a monopsony is similar to the demand curve of any other type of market, i.e. it is downward sloping. Since there is only 1 buyer, the demand curve is also the supply curve. If the monopsonist wants to increase the quantity demanded at a lower price, the supplier (or suppliers) must be able to lower its costs and that generally results in lower labor costs.
