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3 years ago

1) Why might investors prefer floating rate notes over a fixed rate bond?

Business

1 answer:

sladkih [1.3K]3 years ago

8 0

Answer:

These questions are incomplete since the article relating to Hologen company is not attached. However, I would answer them this way.

Explanation:

1) A floating rate bond has a shorter duration; almost zero and it has lower sensitivity to interest rates compared to a fixed rate bond.This means that the former has a lower interest rate risk. Investors tend to demand floating rate bonds when they expect future interest rates to rise because their prices would be close to their par values as their interest rates would also increase. On the other hand, fixed bond's interest rates are inversely related to their prices.

For an issuing company, borrowing money floating rates terms could be riskier for cashflow management purposes . Every time interest rates increases, it means that the company would pay higher interests to lenders which could hurt its profitability. The fluctuations could also negatively affect future financial planning unlike issuing fixed rate bonds whose coupon payments are constant hence decreasing the volatility of earnings.

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The Young Americans for Freedom: Question 9 options: believed that the free market assured personal freedom. worked in tandem wi

katrin2010 [14]

Answer:

The correct option is "A." which is "believed that the free market assured personal freedom."

The Young Americans for Freedom was based on the Sharon Statement.

Explanation:

The Young Americans for Freedom (YAF) is an ideologically conservative youth activism organization that was founded in 1960 as a coalition between traditional conservatives and libertarians on American college campuses.

The summary of the Core Principles of the Sharon Statement are:

Individual freedom and the right of governing originate with God;
Political freedom is impossible without economic freedom;
Limited government and strict interpretation of the Constitution;
The free market system is preferable over all others;
Communism must be defeated, not contained.

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2 years ago

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Brums [2.3K]

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2 years ago

When companies set their dividend payout, they generally aim for a rate that is?

Svet_ta [14]

The companies set their dividend payout, they generally aim for a rate that is when it is sustainable. The dividend payout ratio is the amount of dividends paid to stockholders relative to the amount of total net income of a company. The amount that is not paid out in dividends to stockholders is held by the company for growth. The amount that is kept by the company is called retained earnings.

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2 years ago

What is a lien and when can it be used/

Talja [164]

A lien is a claim against an asset, often to get a loan. All debts related have to be paid before it is removed.

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3 years ago

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Look at Exercise 19.2. Compute the opportunity costs of producing sweaters and wine in both France and Tunisia. Who has the lowe

monitta

Answer:

Answer Illustration : Opportunity Cost of producing Wine is lesser in France, Opportunity Cost of producing Sweaters is lesser in Tunisia. So, France has comparative advantage in Wine, Tunisia in Sweater.

Explanation:

Opportunity Cost is the cost of next best alternative foregone while choosing an alternative.

Opportunity Cost of producing Sweaters & Wine in France & Tunisia are quantities of other goods (Sweaters or Tunias) sacrifised while choosing either. Sweater Opportunity Cost - Wines sacrifised, Wine Opportunity Cost - Sweaters sacrifised.

The country has a comparative advantage in a good if it can produce it with relatively less opportunity cost (in terms of other good sacrifised) than other country.

Ex : Production Possibilities

Wine Sweater Trade off (Wine :Sweater)

France 10 5 1:0.5 or 2:1

Tunisia 8 24 1:3 or 0.33:1

France produces Wine with lesser opportunity cost (sweater sacrifised) than Tunisia [0.5 sweater < 3 sweaters] ; it has comparative advantage in Wine.
Tunisia produces Sweater with less opportunity cost (wine sacrifised) than France [ 0.33 wine < 2 wines] ; it has comparative advantage in Tunisia

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3 years ago