Answer:
A. We should expect higher interest rates and lower stock prices.
Explanation:
Producer price index refers to the price that producers recieve for their products. When there is an increase in PPI it means producers are receiving more revenue.
Increased revenue will result in more money in circulation. To regulate the excess money the monetary authorities will increase interest rate to reduce borrowing and by extension money in the economy.
Because there is now a need to get more funds by the companies, they will lower share prices to make them attractive to prospective investors.
Answer:
Rp = 3% + BP1 * 10.42% + BP2 * 6.1%
Explanation:
Portfolio A:
R_p = R_f + Beta1*Factor1 + Beta2*Factor2
32% = 3% + 1.6*F1 + 2*F2
Portfolio B
29% = 3% + 2.6*F1 - 0.2*F2
Solvig the equatios
3% = -F1 + 2.2*F2
F1 = 2.2F2 - 3%
F1 = 2.2F2 - 0.03
Substituting
29% = 3% + 2.6*(2.2F2 - 0.03) - 0.2F2
29% = 3% + 5.72F2 - 0.078 - 0.2F2
5.52F2 = 29% - 3% +0.078
5.52F2 = 0.26 +0.078
5.52F2= 0.338
F2 = 0.338/5.52 = 0.061
F1 = 2.2F2 - 0.03 = 2.2(0.061) - 0.03
= 0.1042
The return Beta relationship in this economy Rp = 3% + BP1 * 10.42% + BP2 * 6.1%
Answer:
A. I and III
Explanation:
Capital gains on the municipal securities are taxable at the Federal, State and Local Level. Only the interest income from the municipal securities will be exempted from the Federal income tax.
Answer: The answer is c $1,080 $560
Explanation:
The journal entry will be
Dr: common stock $200 million
Dr: paid in capital $180 million
In the stockholders equity section , the treasury stock is seen as a separate line item in the stockholders equity. The treasury stock will be deducted from the total stockholders equity. The treasury stock is not a part of paid in capital nor part of the retained earning.
Therefore the balance in the paid in capital excess of par Retained Earnings is 1,080 $560
B) Fiscal policy requires a short and contentious legislative process
