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Morgarella [4.7K]
3 years ago
15

Treasury bills have a fixed face value (say, $1,000) and pay interest by selling at a discount. For example, if a one-year bill

with a $1,000 face value sells today for $950, it will pay $1,000 $950 $50 in inter- est over its life. The interest rate on the bill is there- fore $50 $950 0.0526, or 5.26 percent.a. Suppose the price of the Treasury bill falls to $925. What happens to the interest rate? b. S uppose, instead, that the price rises to $975. What is the interest rate now? c. (More difficult) Now generalize this example. Let P be the price of the bill and r be the interest rate. Develop an algebraic formula expressing r in terms of P. ( Hint: The interest earned is $1,000 − P . What is the percentage interest rate?) Show that this formula illustrates the point made in the text: Higher bond prices mean lower interest rates.

Business
1 answer:
Snezhnost [94]3 years ago
3 0

Answer:

Please see attachment

Explanation:

Please see attachment

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A firm based in mexico has found its growth is restricted by the limited liquidity of the mexican capital market. what are the f
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The searching companies can work for equity or debt loans in order to raise money on global capital markets. The debt of a foreign institution, lender, and other debt suppliers is also an option to raise money in the capital market. As equity loans include the sale of equity to investors, the issue of bonds is part of debt loans. Capital costs are usually less than in the domestic market and the company can even borrow money from the bank. And enterprises need to be very careful to take into account the risk of adverse exchange rates because, if the peso is to be depreciated, they should be aware of the cost of acquiring the currency needed to repay a foreign exchange loan.

Moreover, foreign equity, floating foreign or Eurobonds offerings, or borrowing on the Euro currency markets may be considered by the Mexican firm. The euro currency market would then certainly provide the company with additional funding at a lower rate domestically. And if the peso decreases in the next 2 years, the company has to repay the credit in a different currency unless the company can use the future market. The value of euro currency loans would definitely be reduced.

We can recognize that the use of both foreign and euro bonds has the same disadvantages as the bonds have to be repaid in an anti-peso currency. The international bond market has important points that are worth considering, given the fewer regulations, disclosure requirements, and fiscal implications if the currency risk can be properly analyzed and minimized. Since the foreign equity market requires no payment to its stockholders and also has the greatest independence from its actions, it is perhaps the most attractive for the company. So, if the hesitations are to be overcome, investors will likely have loan strong growth prospects.

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5 0
1 year ago
can you help me make a timeline, of becoming a wildlife biologist here's the first two but i need a few more timelines to when I
Reptile [31]

Answer:take the arrow and put it on the end and then start going back

Explanation:

this is the thing

6 0
3 years ago
Natalie operates on a pretty tight budget. She is a price-conscious shopper and usually buys store or generic brands to save mon
Llana [10]

Answer: The income effect

Explanation: The income effect refers to the effect on the purchasing power of the consumer when his or her income level changes.

In the given case, Natalie was price conscious  and used to buy lower priced goods with the objective of saving money. When her income rises she starts buying expensive goods as her purchasing power increases with increase in income.

Hence from the above we can conclude that the correct option is A.

7 0
3 years ago
At the beginning of April, Warren Corporation's assets totaled $257,000 and liabilities totaled $77,000. During April the follow
g100num [7]

Answer:

Total liabilities is $170,500

Explanation:

Warren's total liabilities at end of April comprises of the beginning  balance of liabilities of $77,000 plus the notes payable signed in  respect of the building acquired in the course of the year,the computation is shown below:

Beginning balance of liabilities         $77,000

Notes payable                                    $93,500

Total liabilities                                     $170,500

The notes signed by employee of $11,700 is notes receivable as the employee is owing the company and should be classified as notes payable ,but notes receivable instead, an asset.                      

3 0
3 years ago
Haynes Automotive uses labor-hours as its base for calculating a predetermined overhead rate. Haynes had estimated the labor-hou
julia-pushkina [17]

Based on the information given the predetermined overhead rate is 31.89 per direct labor hour.

<h3>Predetermined overhead rate</h3>

Using this formula

Predetermined Overhead rate = Estimated manufacturing overhead / Estimated total labor hours

Let plug in the formula

Predetermined Overhead rate = [$1,026,260 + (46,000×6.25)] / 41,200

Predetermined Overhead rate =1,313,760/ 41,200

Predetermined Overhead rate = 31.89 per direct labor hour

Inconclusion the predetermined overhead rate is 31.89 per direct labor hour.

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3 0
2 years ago
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