<span>Money provides four key functions for an economy,
1. medium of exchange
2. unit of account
3. store of value
4. standard of deferred payment
"when money specifies the value of something", it is performing a function as a medium of exchange, which is the primary function of money. Medium of exchange means the money is used to conduct transactions.
people use money to buy and sell goods.</span>
The higher the interest rate, the more money you will pay back from using their credit card.
Answer:
Jacko Inc Costo fo Capitak8.15%
Explanation:
From the gordon model for stock valuation
<em><u>we clear and solve for cost of equity </u></em>
D1 = D0(1+g)= 0.8 (1.08) = 0.0864
P 57.5
g 0.08
Ke 0.081502609 = 8.15%
Answer: B. Nina will prefer L to M.
Explanation:
Convex utility of wealth function, u(x) is the risk-loving consumer having a a convex utility function, it's slope gets steeper as the wealth increases making the curvature of the utility function measuring the customer's attitude towards risk
Nina will prefer L to M as she has convex utility function as risk loving.
Answer:
Angle Paid $6,000 for the share which has value of $50,000.
Explanation:
The value of the stock is calculated by dividing the dividend ( expected return) with Net Discount rate of Growth rate.
Expected Dividend = $400
Growth = 0% ( as dividend is expected to be same for indefinite period of time)
Discount rate = 8%
Price of the Bond = Dividend / ( Discount rate - Growth rate )
Price of the Bond = $4000 / ( 8% - 0% )
Price of the Bond = $4000 / 8%
Price of the Bond = $4000 / 0.08
Price of the Bond = $50,000
Angle Paid $6,000 for the share which has value of $50,000.
