Answer:
The interest rate is higher in the US.
Explanation:
The forward price is calculated using the following formula,
F= S ( 1+Rd / 1+Rf)^t
where,
- F = Forward rate
- S = Spot rate
- Rd = Nominal interest rate in domestic market
- Rf = Nominal interest rate in foreign market
- t = time in years
We consider that the domestic market is the US and the domestic currency is the USD. Thus, it is a direct quote where 1 EUR = 1.3 USD
The forward price ER is more than the Sport ER only when the interest rate in domestic market is more than the interest rate in foreign market and as a result, the value of domestic currency against a foreign currency in the forward market depreciates.
We can see this by the following example,
Say Spot rate is $1.3 per 1 EUR and the interest rate in US is 10% while that in Euro zone is 5%. When we calculate the forward ER we will see that 1 EUR will buy us more USD in forward (more than 1.3 USD)
F= 1.3 * (1.1 / 1.05)^1 => $1.362 PER 1EUR
Answer:
The economy's inflation rate tends to stable and low
Explanation:
As a central bank has greater independence from the government, the economy inflation rate tends to be stable and low Because when central banks are independent from the government, they tend to make better monetary policy decisions as they do not work for votes, so they take suitable measure without thinking about politics. Thus, they have better credibility in the country.
The independence granted to the central bank tend to let the bank utilizes its full fiscal knowledge at its disposal with the help of past record, knowledge of accountant, economist, financial analyst and other expert working under the independent and head bank. This leads to stability in the economy, and inflation expectation are low.
Answer:
I have attached images of the solution below.
Explanation:
Answers to this question require a balance sheet and I have attached images of my balance sheet solution below.
Answer:
You can focus your marketing and sales more on customers that have buyers who make their own purchasing decisions
Explanation:
Marketing and sales efficiency means getting more sales conversions with little amount of expended effort.
It will be beneficial to focus on customers who have buyers that are decision takers. This makes convincing the prospect and closing the sales deal an easier task . This is because you are dealing with only one person who has the final say in the business. Convincing him/her automatically means that you have the sales deal.
However, with the other customers who have lengthy decision-making processes involving many people within the organization, you will be dealing with convincing multiple people at the same time, before the sales deal is closed. this makes it harder to close more sales deals and increase sales.
The correct descriptions are matched with their account types below:
Basic Checking account - Does not earn interest and has a low minimum balance
Interest-Bearing Checking account - Pays higher interest than a savings account
Savings account - Earns interest and allows unlimited atm use
Money Market deposit account - Restricts access to funds through withdrawals