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3 years ago

Which of the following is true about product markets?

Business

1 answer:

jeka943 years ago

6 0

Answer:

The correct answer is option D.

Explanation:

A product market deals with goods and services. In a product market goods and services are supplied by firms and businesses and purchased by households.

The households in exchange pay businesses and firms which is known as consumer spending for households.

A product market is concerned with the flow of finished goods and services, it does not involve trade in raw materials and other intermediate goods.

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Currently, the yield curve is ascending. A customer believes that the Federal Reserve will start to tighten credit by raising sh

sleet_krkn [62]

Answer:

Short-selling long-term bonds and taking long position on short-term assets

Explanation:

When the yield curve ascends, the long-term bond's price will go down. Hence, do short-sell the long-term bonds. On the other hand, short-term asset's price will be depreciated because Fed tightens credit and raise short-term rate, which is the chance to purchase and make profits from capital gains.

3 0

3 years ago

the italian airline alitalia will pay $10 million to United Airlines one year from today. The spot rate is $1.35/E, while the 1-

Vitek1552 [10]

Answer:

alitalia should do the forward hedge to hedge its transaction exposure

Explanation:

Alitalia can construct the money market hedge as follows

1. borrow Euro whose present value is equal to the amount to be paid.

2. convert it to foreign currency at the current spot rate.

3. place it in a deposit

4. make the payment when the deposit reaches maturity

PV of payment = 10000000/1.05

= 9523809.525

converting in to Euro at the spot rate we get 6802721.09 Euros

so Alitalia has to borrow the above amount and convert it and invest it at 5%.

now the payable amount from the loan is 6802721.09(1+0.03) = 7006802.72 Euros

Hence Alitalia has effective managed to locl in a forward rate of 1.427$/euros (10000000/7006802.72)$/euros

Therefore, alitalia should do the forward hedge to hedge its transaction exposure

6 0

3 years ago

The preferred method for situations involving strategic decision making, projects with a high degree of

Nataly_w [17]

I Found the answer on internet.

The preferred method for situations involving strategic decision making, projects with a high degree of UNCERTAINTY AND PROJECTS WITH AN UNSTOPPABLE SCOPE IS THE TOP-DOWN APPROACH. TOP DOWN APPROACH IS USED TO ESTIMATE PROJECT TIME AND COSTS.

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3 years ago

The U.S. consumer market is large, but other markets may offer what advantage?

Inga [223]

The difference other markets; apart from the US market, have is tht they have exotic wishes which need to be fullfilled but more importantly they have other goods, perhaps not created on the US market. This makes other economies a viable way to earn more mone for the US economy.

3 0

3 years ago

Read 2 more answers

Infinity Corporation purchased equipment with a 10-year useful life and zero residual value for $10,000. At the end of the fifth

sesenic [268]

Answer:

a capital gain of $1,000.

Explanation:

Given,

The cost price of Equipment = $10,000

Useful life of the equipment = 10 years

Residual value = $0

Depreciation (Straight-line method) = Cost price/useful life

Depreciation (Straight-line method) = $10,000/10 = $1,000

Since, it is a straight line method, the depreciation will remain same each year. Therefore, at the end of the fifth year, the depreciation of equipment = $1,000 x 5 = $5,000

At the end of the fifth year,

The book value of the equipment= Equipment - Accumulate depreciation= $(10,000 - 5,000) = $5,000

If the company sales the equipment after the end of the fifth year,

there will be a capital gain.

Capital Gain of equipment = Sales price of equipment - book value of equipment

Capital Gain of equipment = $6,000 - 5,000 = $1,000. The journal entry will be -

Cash/Bank Debit $6,000

Accumulated Depreciation Debit $5,000

Gain on sale of equipment Credit $1,000

Equipment Credit $10,000

5 0

3 years ago

Which of the following is true about product​ markets?

Which of the following is true about product markets?