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4 years ago

The narrowest definition of the money supply (M1) includes:

Business

1 answer:

fenix001 [56]4 years ago

5 0

Answer:

c. cash, checking account balances, and travelers' checks.

Explanation:

Money Supply is the concept that means the amount of the liquid financial products and total currency in the market or economy. It is regulated the macro-economically by the monetary policy. So, there are types of measures of money supply or stock:

-M0: narrowly, it means the hard currency in circulation

-MB: it equals M0+ the hard currency which are not technically in circulation and in bank reserves.

-M1: it is the most common one and equals M0 plus checking accounts plus travelers’ checks and other checkable deposits.

-M2: covers M1 and saving accounts and CDs.

-M3: it surrounds the larger deposits.

-MZM: finally, this indicates the money market deposits.

That’s why we could notice that M1 narrowly means the cash, checking account and travelers’ checks.

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Herb has $20,000 in an interest-bearing time deposit with the Applebottom Bank and Trust Company. While earning a relatively att

topjm [15]

Answer:

CD Certificate of deposit.

Explanation:

Is a type of savings account that has a fixed interest rate and fixed term of months or years. Is a financial product commonly sold by banks, trhift institutions, and credit union. Are similar to savings accounts in the way that they are insured "money in the bank"

4 0

3 years ago

Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $50,000 or $150,000, with equal

kvv77 [185]

Answer:

A. $86,956.52

B. 15%

C.$83,333.33

Explanation:

a) Calculation for how much will you be willing to pay for the portfolio

First step is to calculate the required rate of return on the portfolio using this formula

The required rate of return on the portfolio= Risk Free Return+Risk Premium

Let plug in the formula

The required rate of return on the portfolio=5%+10%

The required rate of return on the portfolio=15%

Second step is to calculate the Expected value of the portfolio

Expected value of the portfolio= 0.5*50,000+0.5*150,000

Expected value of the portfolio =$100,000

Assuming x is the amount you will be willing to pay for the portfolio which means that:

x*(1+15%)=100,000 OR x= $86,956.52

Therefore You would be willing to pay $86,956.52 for the portfolio.

b) Calculation for What will the expected rate of return on the portfolio be

Expected return on the portfolio= (100,000-86,956.52)/86,956.52

Expected return on the portfolio=15%

Therefore the Expected return on the portfolio will be 15%

c) Calculation for What is the price you will be willing to pay now

In a situation where the risk premium is 15%, which means that the required rate of return will be

Required rate of return=5%+15%

Required rate of return=20%

Therefore the price you will be willing to pay= 100,000/(1+20%)

Price=$83,333.33

3 0

3 years ago

On January 1, 2021, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The b

zhannawk [14.2K]

Answer:

$105,000

Explanation:

The computation of interest capitalized in 2021 is shown below:-

Average cost of borrowing

= ($2,000,000 × 0.09 + $4,000,000 × 0.06) ÷ $6,000,000

= ($180,000 + $240,000) ÷ $6,000,000

= 7%

Average expenditure during year = $6,000,000 ÷ 2

= $3,000,000

Capitalized interest first eats up the specific construction loan

= 10% × $1,500,000

= $150,000

Therefore the next $1,500,000 is at the average borrowing rate = Construction loan × Average cost of borrowing

= $1,500,000 × 7%

= $105,000

5 0

4 years ago

Suppose you just bought an annuity with 9 annual payments of $15,400 at the current interest rate of 11 percent per year. a. Wha

Dafna11 [192]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Suppose you just bought an annuity with 9 annual payments of $15,400 at the current interest rate of 11 percent per year.

First, we need to determine the final value with the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Then, we can calculate the present value with the following formula:

PV= FV/(1+i)^n

A)i=11%

FV= {15400*[(1.11^9)-1]}/0.11

FV= $218,125.17

PV= 218,125.17/(1.11^9)= $85,270.53

B) i= 6%

FV= {15400*[(1.06^9)-1]}/0.06

FV= $176,966.27

PV= 176,966.27/(1.06^9)= $104,746.06

C) i= 16%

FV= $269,785.02

PV= $70,940.77

3 0

3 years ago

A group of friends are creating a new mobile paper shredding company that will go to businesses or organizations to shred their

frez [133]

Answer:

The correct answer is letter "B": LLC.

Explanation:

A Limited Liability Company (LLC) is a type of business organization where the owners do not share unlimited liability. This scenario implies that the owners are responsible for the liabilities of the entity according to their contribution. LLCs as considered individual firms with an individual tax identification number, bank account, and name.

3 0

3 years ago