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erica [24]
3 years ago
5

What would a follower of the market segmentation theory say about the supply and demand for​ long-term loans versus the supply a

nd demand for​ short-term loans given the yield curve in part c​? ​(Select the best answer​ below.) A. Market segmentation theorists would argue that the upward slope is due to the fact that under current economic conditions there is greater demand for​ long-term loans for items such as real estate than for​ short-term loans for seasonal needs. B. Market segmentation theorists would argue that the upward slope is due to the fact that under current economic conditions there is a smaller demand for​ long-term loans for items such as real estate than for​ short-term loans for seasonal needs. C. Market segmentation theorists would argue that the downward slope is due to the fact that under current economic conditions there is greater demand for​ long-term loans for items such as real estate than for​ short-term loans for seasonal needs. D. Market segmentation theorists would argue that the upward slope is due to the fact that under current economic conditions there is greater demand for​ short-term loans for items such as real estate than for​ long-term loans for seasonal needs.
Business
2 answers:
adoni [48]3 years ago
8 0

Answer:

Market segmentation theorists would argue that the upward slope is due to the fact that under current economic conditions there is greater demand for​ long-term loans for items such as real estate than for​ short-term loans for seasonal needs.

Correct option A

Explanation:

Market segmentation theory is based on the belief that the market for each segment of bond maturities consists mainly of investors who have a preference for investing in securities with specific durations: short, intermediate, or long-term.

Market segmentation theory asserts that the buyers and sellers who make up the market for short-term securities have different characteristics and motivations than buyers and sellers of intermediate and long-term maturity securities.

Followers of the market segmentation theory would say that the slope upward is evidence that the market has a greater demand for long term loans as opposed to short term loans.

finlep [7]3 years ago
5 0

Answer: The answer is A

Explanation:

The market segmentation theory states that there is no relationship whatsoever between the long term interest rate and the short term interest rate in the financial market .In the sense that ,the long term loan or bond are secured from capital market while short term loan can be secured from the money market. As a result of these the interest rate of one does not have effect on the other one. Another fact of the issue is that the investors in the market are not the same.

The yield curve is a line which shows the relationship between interest rate on a loan or bond and the time for such loan or bond to reach their maturity. Therefore, the upward slope is due to the fact that under current economic conditions there is a greater demand for long term loans for such items such as real estate than for short term loans for seasonal needs.

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The objects that fulfill the needs and wants of consumers are products.
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3 years ago
A corporation reports the following year-end balance sheet data. The company's debt ratio equals: Cash $ 40,000 Current liabilit
Lady_Fox [76]

Answer:

0.37

Explanation:

The formula to compute the debt ratio is shown below:

= Total liabilities ÷ Total assets

where,

Total liabilities would be

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= $110,000

And, the total assets would be

= $300,00

Now put these values to the above formula  

So, the ratio would equal to

= $110,000 ÷ $300,000

= 0.37

4 0
3 years ago
define a stock market bubble, describe what happens after a bubble, and explain how the law of supply and demand creates both bu
Stells [14]

Answer

<u>A bubble is a phenomena in investing that occurs when investors increase their demand in assets so much that they cause the price to move to a value beyond accurate reflection of its actual worthiness</u>. When a bubble happens, <u>the prices of stock will fall rapidly</u>.When there is increase in the share price of stock rapidly caused by individual-perpetuating, the share value can rise beyond asset value making investor to withdraw their money faster because <u>supply will exceed demand and cause share price to fall.</u>

An increase demand on assets by investors will make the price to increase beyond rational economic value. The real worth of the stock will now be determined by firm’s performance. Investing in bubble can appear to last forever, but because they are formed by self-perpetuated reasons, they eventually fall and the money that was invested into them is lost. In such cases, investors would run to withdraw their money and avoid the loss of fall in share prices.

8 0
3 years ago
Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of busin
lutik1710 [3]

Answer:

c.$209,160

Explanation:

Given that the cash received from each sale will be collected over 2 months. If 30% of mechanize is to be sold for cash, then 70% will be sold on account. Further more, 80% of the credit/sale on account will be collected in the month of sale and 20% in the following month.

Hence for October, cash collection will include 20% of credit sale from September and 80% of the credit sale in the month.

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= $250,000 - (30% × $250,000)

= $175,000

Amount expected to be collected from this sale in October

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= $35,000

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= $217,700

Amount of this credit sale to be collected  in October

= 80% × $217,700

= $174,160

Total collected from accounts receivable in October

= $174,160 + $35,000

= $209,160

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