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I am Lyosha [343]
3 years ago
5

Calculate the dollar rates of return on the following assets: A painting whose price rises from $200,000 to $250,000 in a year.

A bottle of a rare Burgundy, Domaine de la Romanée-Conti 2011, whose price rises from $255 to $275 between 2013 and 2014. A £10,000 deposit in a London bank in a year when the interest rate on pounds is 10 percent and the $/£ exchange rate moves from $1.50 per pound to $1.38 per pound.
Business
1 answer:
Gennadij [26K]3 years ago
7 0

Answer

A. 25%

B.8%

C. 1.2%

Explanation:

a)

($250,000 − $200,000)/$200,000 = 0.25 or 25%

b)

($275 − $255)/$255 = 0.08 or 8%

Their was No exchange rate movements involved assets & returns all in U.S. dollars

c.

Step 1: £10,000 * $1.50/£ = $15,000 initial $ investment

Step 2: £10,000 * (1.10) = £11,000 at end of year

Step 3: £11,000 * $1.38/£ = $15,180 at end of year

Step 4: ($15,180 - $15,000)/$15,000 =

0.012, or 1.2%

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The following data apply to Garber Industries, Inc. (GII): Value of operations $1,000 Short-term investments $100 Debt $300 Numb
kari74 [83]

Answer:

The correct option is $7,option C

Explanation:

The approach here is that we calculate the value of the firm after the cash dividend distribution ,which is simply the value of operations of $1000 since the short-term investments of $100 has been used in paying dividends.

Thereafter,the value of equity is the value of operations of $1000 minus the value of debt at $300,that is $700 ($1000-$300).

Finally intrinsic share price=value of equity/number of shares

number of shares is 100

intrinsic value per share=$700/100=$7 per share

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3 years ago
What is a drug cartel
Leni [432]

<em>Answer:</em>

<em>A drug cartel is a criminal organization with the intention of supplying drug trafficking operations. They range from loosely managed agreements among various drug traffickers to formalized commercial enterprises.</em>

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3 0
3 years ago
A country produces only one good. It produced​ 5,000 units of the good during Year 1 and​ 6,000 units of the good in Year 2. The
Veseljchak [2.6K]

Answer:

.A) $1, 920,000

Explanation:

Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.

Nominal GDP is the GDP of country using current year prices

Nominal GDP = current year price × quantity

(6000 × 320) = $1,920,000

I hope my answer helps you

3 0
3 years ago
Assume the spot Swiss franc is $0.7000 and the six-month forward rate is $0.6950. What is the minimum price that a six-month Ame
Rama09 [41]

Answer:

2 cents

Explanation:

The spot price = $0.7000 = 70 cents, The forward rate = $0.6950 = 69.5 cents and the call option with striking price = $0.6800 = 68.00 cents

The annualized six month rate = 3 1/2 % = 3.5 %, therefore the rate = r/n, where n is the number of period per year = 2. Therefore r/n = 3.5% / 2 = 0.035 / 2 = 0.0175

The minimum price = Maximum (spot price - striking price, (forward rate - striking price) / (1 + 0.0175), 0) = Maximum(70 - 68, (69.5 - 68)/ 0.0175, 0)

Minimum price = Maximum (2 , 1.47, 0) = 2 cents

4 0
3 years ago
Caspian Sea Drinks needs to raise $41.00 million by issuing bonds. It plans to issue a 14.00 year semi-annual pay bond that has
Darya [45]

Answer:

Explanation:

Coupon rate = 5.07%

Yield to maturity = 4.84%

Rate = Yield/2 = 2.42%

N = 14 = 14*2 semiannually = 28 semiannually

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Need to find price which is PV

Using the financial calculator, PV = $1023

Number of bonds to be issued = 41,000,000/1023 = 40,078

5 0
3 years ago
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