Answer: Option (1) is correct.
Explanation:
If the interest rate in a home country is lower than the U.S rate of interest then the government and firms of home country won't demand for U.S. funds as it will become expensive for the corporations to borrow funds from U.S. at such a higher rate. Hence, less demand for U.S funds.
There is an inverse relationship between the U.S. interest rate and foreign demand for U.S. funds. If there is an increase in the U.S. interest rate as a result foreign demand for U.S. funds decrease. As it will be not affordable for the borrowers to take funds at a higher rates.
Answer:
Future value
Explanation:
The name for computation that allows you to determine how much money to deposit now to earn a desired amount in the future is "Future value." Future value is the equivalent of an asset at a particular date. It estimates specific nominal future sum of cash that an invested sum of money is "worth" at a stipulated period in the future considering a specific interest rate, or more commonly, rate of interest; it is the immediate price multiplied by the aggregation function.
People to do more types of math
Answer:
sharing risk means that the premiums and losses of each member of a group of policyholders are allocated within the group based on a predetermined formula
Explanation:
insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. most entity transfer the risk of the company taking up an insurance.
Answer:
After-tax rates of return on the municipal bond is 4%
After-tax rates of return on the corporate bond is 4.4%
Explanation:
given data
rates of return = 4% = 0.04
rates of return = 5.5% = 0.055
tax bracket = 20% = 0.20
solution
we get here After-tax rates of return on the municipal bond that is
and here no taxes are levied so
rates of return = return ( 1 - 0 )
rates of return = 0.04 (1 - 0)
rates of return = 0.04 or 4%
and now we get After-tax rates of return on the corporate bond
rates of return = 0.055 × (1 - 0.20)
rates of return = 0.044 or 4.4%