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mamaluj [8]
3 years ago
5

On October 15, 2019, the Department of Labor announced that the Producer Price Index (PPI) experienced an unexpected 1.1 percent

increase in September, the largest jump in 9 years. Based on this information alone, what would you expect to happen to interest rates and stock prices?
A. We should expect higher interest rates and lower stock prices
B. We should expect higher interest rates and higher stock prices
C. We should expect lower interest rates and lower stock prices.
D. We should expect lower interest rates and higher stock prices.
Business
1 answer:
Kruka [31]3 years ago
5 0

Answer:

A. We should expect higher interest rates and lower stock prices.

Explanation:

Producer price index refers to the price that producers recieve for their products. When there is an increase in PPI it means producers are receiving more revenue.

Increased revenue will result in more money in circulation. To regulate the excess money the monetary authorities will increase interest rate to reduce borrowing and by extension money in the economy.

Because there is now a need to get more funds by the companies, they will lower share prices to make them attractive to prospective investors.

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Lady bird [3.3K]

<span>Proof beyond a reasonable doubt.</span>

The prosecutor bears the burden of proof and is required to demonstrate the version of their events to this standard. The prosecutor will be required to present evidence that shows beyond any reasonable doubt that the defendant is guilty before they can get a conviction.

7 0
3 years ago
Besides the actual mortgage payment, which also factors into the monthly payment on a home?
Maurinko [17]

It is the property taxes that go along with the mortgage monthly payment

So the answer is C: Property taxes

The lender will generally set up an escrow account to cover for the property taxes and pay these items on your behalf when they are due

6 0
3 years ago
If you consider the equity of a firm to be an option on the firm’s assets then the act of paying off debt is comparable to _____
snow_tiger [21]

Answer: The correct option is "c.exercising an in-the-money put option".

Explanation: If you consider the equity of a firm to be an option on the firm’s assets then the act of paying off debt is comparable to <u>exercising an in-the-money put option</u> on the assets of the firm.

because he would be paying the debt with the participation in the equity of the company.

3 0
3 years ago
Up in Smoke Tobacco Shops' bond carries a 9 percent coupon, pays interest semiannually, and has 10 years to maturity. What is th
lara [203]

Answer:

10%

Explanation:

Since the bond is selling at a discount, it means that the coupon rate is blow the market rate, so the actual rate must be higher. Since there is only one option with an interest rate above 9%, we must check to see if it works.

10% yearly interest rate = 5% semiannual interest rate

we must determine the PV of the 20 coupons paid and the face value at maturity.

to calculate the PV of the 20 coupons ($45 each) we can use an excel spreadsheet and the NPV function with a 5% discount rate: PV of the coupons = $560.80

the PV of the face value in 10 years = $1,000 / 1.05²⁰ = $376.89

the present value of the coupons and the bond at maturity = $560.80 + $376.89 = $937.69. The PV using a 5% semiannual rate is very similar to $937.75, and since the question asked us to round up to the nearest whole percent, we can assume it is correct.

6 0
3 years ago
Connor Corp. has large amount of data that they are trying to analyze from the last 15 years. They have an arithmetic sales grow
MrRa [10]

Answer:

11.14%

Explanation:

Blume's formula is used to combine both arithmetic and geometric returns. This is because using arithmetic growth rate exclusively would be overly optimistic for longer time horizons and on the other hand, using geometric growth rates exclusively would be overly pessimistic for short time horizons.

Using the attached formula, plug in the given numbers;

R(T) would be the sale growth rate we need to calculate.

R(T) = \frac{5-1}{15-1} *0.09 + \frac{15-5}{15-1} *0.12

R(T) =0.0257 + 0.0857

R(T) = 0.1114 as a decimal

Therefore, the forecast sales growth would be 11.14%

7 0
3 years ago
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