Answer:
a. The present discounted value of a stream of returns can be calculated in real or nominal terms. TRUE
This is true because the present value of returns can be calculated using nominal rates which do not account for inflation, or using real rates which will account for inflation.
b. The higher the one-year interest rate, the lower the present discounted value of a payment next year. TRUE
Higher interest rates discount payments faster because they discount by dividing the payment so a higher rate would divide the payment more and lead to a lower present value.
c. Interest rates are normally expected to be constant over time. FALSE
Interest rates change over time in response to economic conditions.
d. Bonds are a claim to a sequence of constant payments over a number of years. TRUE
As a bondholder, you are entitled to payments over the life of the bond which means that it is a claim to constant payment over a number of years.
e. The yield curve normally slopes up. TRUE
The yield curve slopes upward to represent that interest rates increase in future.
Answer:
Answer for the question :
Tom sold mutual fund shares, which he had owned for 3 years, so that he could use the proceeds to return to college. Tom is in the 12% marginal tax bracket, and his capital gain from the sale was $12,000. How much tax does Tom owe on the gain?
is explained in the attachment.
Explanation:
Answer:
2.25 units.
Explanation:
Processing time is 5 minutes per unit for step 1. The total capacity is 60 minutes then no. of units produced can be;
60 / 5 = 12 units per hour.
For second step processing time is 4 minutes per unit. There is 0.85 unit of product is scrapped. Then no. of units produced per hour can be ;
60 / 4 = 15 units per hour.
After scrap the net product units per hour will be;
15 units * [1 - 0.85] = 2.25 units per hour.
Answer:
Price of y(Py)=$2 per unit
Explanation:
Marginal utility can be defined as the additional utility of a consumer as a result of the additional unit of goods consumed.
Let
Marginal utility of x= MUx
Marginal utility of y=MUy
Price of x=Px
Price of y=Py
Given
MUx=40 utils
MUy=16 utils
Px=$5
Py=?
Then,
MUx/Px=MUy/Py
40utils/$5=16 utils/Py
8 utils/$ =16utils/Py
Make Py subject of the formula by cross multiplying
Py×8= 16
Py=16/8
Py=$2 per Unit
Price of y=$2 per unit
Answer: Economies of Scale
Explanation:
Economies of scale refers to the tendency of costs to reduce per unit as the number of units produced increases. This is because the producer is able to share the costs amongst all the units produced.
George was getting those ingredients to make a single burger so the produce he used were small in quantity and cost him more. The companies that make sandwiches in large numbers buy and produce the ingredients in bulk which reduces their prices.
For example, George went to Minneapolis to get salt for one burger, those companies would go and get salt for 10,000 burgers at the same time which would reduce the cost by dividing it across the 10,000 burgers.
This cost saving from economies of scale enables the local deli to sell products at a cheaper rate than if we had to make them ourselves.