Answer: True
Explanation:
Tax is the amount of money that's paid by an individual or firm to the government. Subsidies are the funds or other forms of assistance that's given by the government to firms in order to help them increase their production and lower the prices of goods.
Fir example, if the government wants to decrease consumption in the economy, the government can increase tax. On the other hand, the government can increase consumption by reducing tax as people will have money to spend and also more money for production purpose.
Answer:
ALL OF THE ABOVE
Explanation:
Behavioral finance is an interesting mix of psychology and finance which deals with the effect of psychology on the behavior of investors.
Looking at the options given in the scenario they all show traits of investors behaving in a way that portrays psychological reaction
Hence it can be concluded that Problems with behavioral finance include ALL OF THE FOLLOWING:
I. The behavioralists tell us nothing about how to exploit any irrationality.
II. The implications of behavioral patterns are inconsistent from case to case, sometimes suggesting overreaction, sometimes underreaction.
III. As with technical trading rules, behavioralists can always find some pattern in past data that supports a behavioralist trait.
Answer:
a. 3.56%
b. 2.31%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $1,040
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 4% ÷ 2 = $20
NPER = 11 years × 2 = 22 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is = 2 × 1.78% = 3.56%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 3.56% × ( 1 - 0.35)
= 2.31%
Answer:
True
Explanation:
If there is a more number of compounding periods within a year so it would result into the higher price of future value for lump sum investment in year 0 but the case would be adverse with the present value i.e there is less amount in the present value with regard to lumpsum amount i.e to be recieved in the future date
Hence, the given statement is true
Answer:
Option (B) is correct.
Option (D) is correct.
Explanation:
If banks kept 100 percent of deposits on hand as reserves, then this will indicate that all the deposited amount would be saved as reserves. Therefore, the reserve requirement ratio is 100% here which means that:
Reserve ratio = 100%
= 100 ÷ 100
= 1
and the money multiplier = 1 ÷ reserve requirement ratio
= 1 ÷ 1
= 1
Banks would not be able create new money by giving loans because the reserve requirement ratio is 100%.
