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2 years ago

ARMs help lenders combat unanticipated inflation changes, interest rate changes, and a maturity gap.

1 answer:

5 0

The statement; ARMs help lenders combat unanticipated inflation changes, interest rate changes, and a maturity gap is "True".

<h3>What is (ARM) Adjustable-Rate Mortgage?</h3>

A home loan with a variable interest rate is known as an adjustable-rate mortgage (ARM). The starting interest rate on an ARM is set for a specific amount of time. Following then, the interest rate charged on the unpaid balance resets sporadically, sometimes on a monthly basis.

The characteristics of ARM are-

A mortgage with an adjustable rate (ARM) is a loan for a home whose interest rate is subject to cyclical change based on the performance of a chosen benchmark.
The amount that the interest rate and/or payments can increase annually or throughout the life of the loan are typically capped in ARMs.
For purchasers who are going to maintain the loan for a short time and can afford any potential rises in their interest rate, an ARM might be a wise financial decision.

To know more about the Adjustable-Rate Mortgage, here

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The complete question-

ARMs help lenders combat unanticipated inflation changes, interest rate changes, and a maturity gap. (True/False)

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2 years ago

Based on the readings: match the following business example with its associated product cost term A businessowner pays for rent

sladkih [1.3K]

Answer:

A business owner pays for rent and equipment at their office ⇒ FIXED COSTs since the amount of rent paid should be the same year after year

An airline considers the costs of serving food and beverages to its passengers ⇒ VARIABLE COSTS since the cost of serving food will increase as the number of passengers increase, or will decrease if the number of passengers decrease

A company considers the costs it pays to its employees ⇒ VARIABLE COSTS since the number of employee can vary and the number of hours worked can also vary

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3 years ago

Ayayai Corp. had the following inventory transactions occur during 2022: Units Cost/unit Feb. 1, 2022 Purchase 102 $42 Mar. 14,

Dominik [7]

Answer:

Income after tax = $1666

Explanation:

LIFO (Last-In-First-Out) is a method of inventory valuation where the goods that are received last are used first. In other words, the latest stock is used first. This is common for bulky inventory, stacked one on top of another.

In order to obtain the after-tax income, both the gross profit and income before tax are required. To obtain gross profit, we require the cost of goods sold information. The inventory information is as follows:

Feb 1 : Purchases : 102 units x $42 = $4284

Mar 14 : Purchases : 175 units x $44 = $7700

May 1 : Purchases : 124 units x $46 = $5704

288 units were sold

The COGS would be:

124 x $46 = $5704

164 x $44 = $7216

Thus COGS : $5704 + $7216 = $12920

Gross profit : Sales - COGS

Sales : $59 x 288 = $16992

Gross Profit = $16992 - $12920 = $4072

Income before tax : Gross Profit - Expenses

Operating expenses : $1692

Income before tax = $4072 - $1692 = $2380

Income after tax : Income before tax - (tax rate x income before tax)

Tax rate : 30%

Income after tax = $2380 - ($2380 x 30%) = $1666

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3 years ago

Marginal cost is ________ the average variable cost and the average total cost when they are ________

fredd [130]

Answer: equal to; at their minimum.

Explanation: Marginal cost is equal to the average variable cost and the average total cost when they are at their minimum.

Thus, when average total cost is increasing, marginal cost must be above average total cost; and when at its minimum, marginal cost is equal to average total cost. Also, when average variable cost is at its minimum, marginal cost equals average variable cost.

Marginal cost is the increase in the cost that accompanies a unit increase in output; the partial derivative of the cost function with respect to output.

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3 years ago

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Zina [86]

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4 years ago