Answer:
1 year rate 2 year from now = 12% (Approx)
Explanation:
Given:
1-year rate = 8%
2-year rate = 9%
3-year rate = 10%
Computation:
According to Pure Expectations Hypothesis,
(1 + 3-year rate)³ = (1 + 2-year rate)² (1 + 1 year rate 2 year from now)
(1.10)³ = (1 + 1.09)²(1 + 1 year rate 2 year from now)
1.331 = 1.1881 (1 + 1 year rate 2 year from now)
(1 + 1 year rate 2 year from now) = 1.12
1 year rate 2 year from now = 0.12
1 year rate 2 year from now = 12% (Approx)
Answer:
C. Shut down the presses printing my book
Explanation:
Since the average variable cost of producing the book is above the demand curve, the best course of action is to shut down the printing (production) of more books. The author would lose less money by shutting down operations rather than continuing production at a variable cost higher than the demand he's receiving for the books.
In economics, when profit is less than the average variable cost, firms are advised to stop production in the short run and incur economic loss on fixed inputs. This is because with continued operations, total revenue would not only be lower than total cost, but rather, would also be less than total variable cost.
The answer to this question is <span>Company strengths and weaknesses.
In this context, company strength refers to all the factors that make the company stand out among other competitors in the market (such as good products, fame, good researchers, etc)
The weakness, on the other hand, refers to something that needed to be taken care of if the company want to win the competition in the market. (such as huge debt ratio, scandals, etc)
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Answer:
Present value is nothing but how much future sum of money worth today. It is one of the important concepts in finance and it is a basis for stock pricing, bond pricing, financial modeling, banking, and insurance, etc. Present value provides us with an estimated amount to be spent today to have an investment worth a certain amount of money at a specific point in the future. Present value is also called a discounted value. It is an indicator for investors that whatever money he will receive today can earn a return in the future. With the help of present value, method investors calculate the present value of a firm’s expected cash flow to decide if a stock is worth to invest today or not.
The formula for calculating PV is shown below
PV = CF/ (1+r)n
Here ‘CF’ is future cash flow, ‘r’ is a discounted rate of return and ‘n’ is the number of periods or year.
Example
Let’s say that you have been promised by someone that he will give you 10,000.00 Rs 5 year from today and interest rate is 8% so no we want to know what the present value of 10,000.00 Rs which you will receive in future so,
PV = 10,000/ (1+0.08)5
PV = 6805.83 (To the nearest Decimal)
So present-day value of Rs 10,000.00 is Rs 6805.83
Explanation:
The saving rate from the highest to the lowest would be :
Traditional Banks +/- 5 % of rates
Online banks +/- 4 % of rates
Credit Union +/- 2.5 % of rates
hope this helps