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ICE Princess25 [194]

3 years ago

8

If the Federal Reserve charges 2.5% interest rate on loans to financially healthy banks and pays 1.75% interest on reserves held

by the banks, the Effective Federal funds rate could possibly be

1 answer:

Iteru [2.4K]3 years ago

5 0

Answer:

1.5%

Explanation:

Solution is attached in the below file

<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark"> docx </span>

<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark"> docx </span>

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2 years ago

Listed below are several transactions. For each transaction, indicate whether the cash effect of each transaction is reported in

Scilla [17]

Answer:

Transaction Type of Activity Cash Inflow or

Cash Outflow

1 Payment of employee salaries Operating Cash outflow

2. Sale of land for cash Investing Cash Inflow

3. Purchase of rent in advance investing Cash outflow

4.Collection of an account receivable Operating Cash inflow

5.Issuance of common stock Financing Cash inflow

6.Purchase of inventory Operating Cash outflow

7.Collection of notes receivable Investing Cash inflow

8.Payment of income taxes Operating Cash outflow

9. Sale of equipment for a note recei. Non cash No effect

10. issuance of bonds Financing Cash inflow

11. Loan to another firm Investing Cash outflow

12. Payment of a long term note pay. Financing Cash outflow

13. Purchase of treasury stock Financing Cash outflow

14. Payment of an account payable Operating Cash outflow

15. Sale of equipment for cash Investing Cash inflow

Explanation:

Statement of cash flows shows the cash generated and expended by an entity during an accounting period. The statement divides the inflow and outflow of cash into three sections: operating, investing and financing activities.

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3 0

3 years ago

Both Bond Sam and Bond Dave have 7.3 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has three

Ainat [17]

Answer:

-5.14 for sam

-18.01% for dave

Explanation:

We first calculate for Sam

R = 7.3%

We have 2% increase

= 9.3%

We calculate for present value of coupon and present value at maturity using the formula for present value in the attachment

To get C

1000 x 0.073/2

= 36.5

time= 3 years x 2 times payment = 6

Ytm = rate = 9.3%/2 = 0.0465

Putting values into the formula

36.5[1-(1+0.0465)^-6/0.0465]

= 36.5(1-0.7613/0.0465)

36.5(0.2385/0.0465)

= 36.5 x 5.129

Present value of coupon = 187.20

We solve for maturity

M = 1000

T = 6 months

R = 0.0465

1000/(1+0.0465)⁶

= 1000/1.3135

Present value = 761.32

We add up the value of present value at maturity and that at coupon

761.32 + 187.20

= $948.52

Change in % = 948.52/1000 - 1

= -0.05148

= -5.14 for sam

We calculate for Dave

He has 20 years and payment is two times yearly

= 20x2 = 40

36.5 [1-(1+0.0465)^-40/0.0465]

Present value = 36.5 x 18.014

= 657.511

At maturity,

Present value = 1000/(1+0.0465)⁴⁰

= 1000/6.1598

= 162.34

We add up these present values

= 657.511+162.34 = $819.851

Change = 819.851/1000 -1

= -0.1801

= -18.01%

4 0

3 years ago