Answer:
The correct answer is letter "D": $77 million; $8 million.
Explanation:
The U.S. Federal Reserve (Fed) establishes a minimum amount of money banks must have in front of unexpected demand. That minimum is called Bank Reserve. <em>The current bank reserve set by the Fed is 10% of the bank's demand and checking deposits.
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Excess reserves <em>is the amount of money banks have on top of the bank reserve</em> that cannot loan. As banks do not profit in interest with that amount of money, they do not tend to have much excess reserves.
In the case:
- Bank required reserve = $770,000,000 x 10%
- Bank required reserve = $77,000,000 = $77 million
- Excess reserve = $85,000,000 - $77,000,000
- Excess reserve = $8 million
Answer:
$1,203.83
Explanation:
For computing the present value using the continuous compounding we need to apply the formula and the calculation part is also shown in the spreadsheet. Kindly find it below.
Given that
Face value = $2,600
Interest rate = 11%
Time period = 7 years
The formula is shown below:
= Face value ÷ EXP (Interest rate × Time period)
= $2,600 ÷ EXP (11% × 7)
= $1,203.83
Answer:
Re = 15.29%
Explanation:
beta at current debt level:
11.5% = 5% + (beta x 6%)
6.5% = 6%beta
beta = 6.5% / 6 = 1.083
unlevered beta = 1.083 / {1 + [(1 - tax rate) x debt / equity]} = 1.083 / {1 + [(1 - 40%) x 25 / 75]} = 1.083 / 1.2 = 0.9025
cost of levered beta at 60% debt:
0.9025 = beta / {1 + [(1 - 40%) x 60 / 40]}
0.9025 x 1.9 = beta
beta = 1.7148
Re = 5% + (1.7148 x 6%) = 15.29%
Answer:
Hannah will lose her suit.
Explanation:
Niels and Hannah did not have a binding deal. They did not decide on a specific lot of land or on a price. It is never even decided how the two of them will decide on a fair method of agreeing on the price. Don't be fooled by words like binding contract. The terms are too vague and therefore Hannah will ultimately lose the case.
The answer to this question is the "output contract". This is a mutual agreement between the producer of the product and the buyer. The producer agrees that he will sell all his product to the buyer and the buyer agrees that he will buy all the product delivered to him by the producer. Thus, to complete the sentence we have it "<span>Bay crab processor has a contract with Jim who is a local crabber and inform Jim that he will buy all the crabs. Then, Jim catches during the season for 35 per bushel. this is an example of an OUTPUT contract.</span>"
