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iragen [17]
4 years ago
14

Assume one investor bought a 10-year inflation-protected bond with a fixed annualreal rate of 1.5% and another investor bought a

10-year bond without inflationprotection with a nominal annual return of 4.2%. If inflation over the 10-year periodaveraged 2 %, which investor earned a higher real return?
Business
1 answer:
Doss [256]4 years ago
3 0

Answer:

The second investor earned a higher return.

Explanation:

The first investor earns 1.5% for ten years. There is no discount of inflation because the interest rate is already protected.

In the other hand, and according to fisher, is necessary to discount the inflation to the nominal rate and that's going to be the real interest received by the second investor.

Real interest rate = Nominal - inflation

Real interest rate = 4.2% - 2% = 2.2% anual

Comparing both rates we find that

<h2></h2><h2>Real interest of investor 2 > Real interest of investor 1 </h2>

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Many different project life cycle models are used for different types of projects, such as information systems, improvement, res
n200080 [17]

Answer:

True

Explanation:

  • For different types of projects, many different projects life cycle models are used, such as data management , advancement, research and technology.  
  • In general, a life cycle for a program includes a number of stages controlled by a set of decisions that verify that the scheme is mature sufficiently leave one phase and join the other.

Therefore following statement is TRUE.

8 0
3 years ago
Mary's bakery is trying to determine what price to charge for her cookies, so mary places a low price on them and raises it each
AfilCa [17]
The answer is that, "Mary was conducting an experiment".
Mary has done the experiment by raising the price of cookies every week, and when her experiment finished, she concluded a result from her experiment about the price of cookies which is more profitable. So in daily life we do many experiments to get conclusion from them sometimes it takes more time some times less.
3 0
4 years ago
According to the simple monetary model, if money is growing at 5% in the United States and 6% in the United Kingdom, while real
Murrr4er [49]

Answer:

A)

Since the money supply is growing at a much faster rate than real GDP in the US, this means that the inflation rate in the US will be higher than the inflation rate in the UK. In both countries the money supply is growing at a faster rate, but the difference in the US is larger (money supply is growing 67% faster that real GDP), while the money supply in the UK is growing 20% faster than real GDP.  

This means that the US dollar should depreciate against the British pound.

B)

If you have US dollars, then you should increase your investments in the UK because the pound will be worth more US dollars in the future.

C)

More American goods should be exported to the UK, and less British goods should be imported to the US. Since the US dollar should be cheaper, American products are cheaper. The opposite will happen to British products.

7 0
3 years ago
Financial Results for Birmingham Wire and Cable Supply Company Year end 12/31/15 Income Statement Partial Balance Sheet Net Sale
Fofino [41]

Answer:

1. <u>Calculation of Inventory Turnover Ratio </u>

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

When Average inventory= Opening Inventory+ Ending Inventory / 2 = (1,542,553 + $1,735,455)/2  = $1,639,004.

Inventory Turnover ratio = $7,250,000 / $1,639,004

Inventory Turnover ratio = 4.42 times

2 If the price of wire is increasing, its good opportunity for the company to take advantage with proper planning. The company has to increase the purchase of the stock to take this advantage however it should also be noted about the opportunity cost as more money now will be invested in the stock. If the increase in Price is minimal then there is no need to increase the purchase of the stock .

6 0
3 years ago
Which type of ICS facility is used to temporarily position and account for personnel, supplies, and equipment awaiting assignmen
Blizzard [7]

Answer:

B. Staging Area

Explanation:

According to my research on different ICS facilities, I can say that based on the information provided within the question the type of facility being described is known as a Staging Area. This is a location where personnel, supplies,  vehicles, and equipment or material are assembled before actually being used.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

3 0
4 years ago
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