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rosijanka [135]
3 years ago
12

The balance sheet below reflects Zee Bank after its purchase of $50 million in government securities from the Fed. Assume a requ

ired reserve ratio of 10%, that banks hold no excess reserves, and all currency is deposited into the banking system. Assets Liabilites and net worth Reserves $15 million Liabilities: Checking Deposits $150 million Loans $275 million Net Worth $190 Treasuries $50 million How did the purchase of $50 million in government securities from the Fed affect the money supply
Business
1 answer:
UkoKoshka [18]3 years ago
3 0

Answer:

$500 million

Explanation:

The solution of the money supply and its effect is here below:-

Decrease in money supply = $50 million ÷ reserve ratio

= $50 million ÷ 10%

= $500 million

If $50 million were used to repay loans, that will have raised money supply. Thus, buying $50 million in government securities from the fed reduces the supply of capital.

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Mr. C made the following gifts: $12,000 to a university to pay tuition costs for his niece. An undeveloped tract of land to his
Nonamiya [84]

Answer:

$10,000

Explanation:

Gifts are only taxed when their fair market value is higher than $15,000. Any gifts made to your spouse are not taxable. Gift taxes are calculated on a  per person base, as long as they do not exceed the lifetime exemption (which is $11.58 million).

The tuition costs of her niece are not taxable since they are less than $12,000. The stocks given to his wife are not taxable either. The only taxable gift is the land given to his sister which had a FMV of $25,000. The taxable amount = $25,000 - $15,000 = $10,000

5 0
3 years ago
Crisp Cookware's common stock is expected to pay a dividend of $1.75 a share at the end of this year (D1 = $1.75); its beta is 0
DedPeter [7]

Answer:

P3 = $96.9425 rounded off to $96.94

Explanation:

To calculate the market price of the stock three years from today (P3), we will use the constant growth model of DDM. The constant growth model calculates the values of the stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D1)  /  (r - g)

Where,

  • D1 is the dividend expected for the next period
  • g is the constant growth rate
  • r is the required rate of return on the stock

To calculate the price of the stock today (P0), we use the dividend expected for the next period (D1). So, to calculate the price at the end of 3 years (P3) we will use D4.

We first need to calculate r using the CAPM equation. The equation is,

r = rRF + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the market risk premium

r = 0.058 + 0.6 * 0.05  

r = 0.088 or 8.8%

Using the price formula for DDM above and the values for P0, D1 and r, we can calculate the g to be,

 

80 = 1.75 / (0.088 - g)

80 * (0.088 - g) = 1.75

7.04 - 80g = 1.75

7.04 - 1.75 = 80g

5.29/80 = g

g = 0.066125 or 6.6125%

We first need to calculate D4.

D4 = D1 * (1+g)^3

D4 = 1.75 * (1+0.066125)^3

D4 = 2.12061793907

Using the formula from DDM for P3, we can calculate P3 to be,

P3 =  2.12061793907 / (0.088 - 0.066125)

P3 = $96.9425 rounded off to $96.94

4 0
3 years ago
Deciding what data to collect, actually collecting the data and analyzing it, and reporting this data are all parts of structuri
Fynjy0 [20]

Answer:

The correct answer is the option A: True.

Explanation:

To begin with, the concept of <em>"Monitoring Information System"</em> in the field of business and in the techonolgy areas is refered to the type of system that is used with the main purpose of allowing the users to capture data, process and dissenimate information in a systematic way in order to improve the velocity of the time used to accomplish those tasks in the organization. Moreover, when it comes to aggregating the "project" part in the term, the system focuses in the recollection of data and its analysis and use in order to help the project to complete what it needs to.  

4 0
2 years ago
A financial analyst learns that the Bank of England has just issued a new bond that promises to pay £1,000 in one year’s time wh
Ilya [14]

Answer:

the price will go lower and I know how much it would be

6 0
2 years ago
Abbot Inc. is considering the following investment opportunities. Required Compute the future value under each of the investment
Over [174]

Answer:

$ 67,196

$132482

$88,727

$131,761

Explanation:

The formula for calculating future value:

FV = P (1 + r/m)^mn

FV = Future value  

P = Present value  

R = interest rate  

N = number of years  

m =number of compounding

$50,000 x ( 1 + 0.06/2)^10 = $67,196

$60,000 x ( 1 + 0.08/4)^40 = $132,482

$40,000 x (1 + 0.1/12)^96 = $88,727

$80,000 x ( 1 + 0.05 /12) ^120 = $131,761

7 0
2 years ago
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