Given Information:
Lifetime cap = 5 %
Initial interest rate = 4 %
Periodic adjustment rate = 1%
Required Information:
Maximum annual interest rate = ?
Answer:
Maximum annual interest rate = 9%
Explanation:
In adjustable rate mortgage scheme, lifetime cap is the maximum limit that is allowed after the initial the interest rate. The periodic adjustment rate is 1% and it is the maximum adjustment allowed in one year.
Maximum annual interest rate = Initial interest rate + Lifetime Cap
Maximum annual interest rate = 4% + 5%
Maximum annual interest rate = 9%
Therefore, maximum annual interest rate you could end up paying on the ARM is 9%
Answer:
The answer is "competitive parity with each other".
Explanation:
It refers to spending on a level equal to your opponents, while you spend more on performing than our competition in a competitive edge. The goods offered by the competitors are each were and can easily be swapped with the product.
It is a defensive strategy used by companies, whilst still the financial resources, to protect their image, brand & positioning. A sector where, compared to others in your sector, you achieve ordinary or average results.
Answer:
The answer is D.
Explanation:
Income elasticity of demand potatoes is negative. Potato is considered an inferior goods because demand for an inferior good decreases with an increase in income and increases with a decrease in income.
Last year when the income was $30,000, 60 pounds was consumed. It increased to 80 pounds when the income fell to $20,000.
A normal good will increase with an increase in income and decrease with a decrease in income.
Answer:
The answer is "Option E".
Explanation:
Please find the complete question in the attached file.
Varied portfolios and mixes of diversified assets get a different relationship, eliminating uncontrolled danger and only risk premium. Its total risk is a combination of non - systematic and systematic risks. Therefore, the diversification principle reduces some portion of the risk profile, and that is why distributing an investment across a range of varied assets reduces some of the risk profile.
Answer:
The risk of a portfolio declines as the number of stocks in the portfolio increases.
Explanation:
In simple words, diversification refers to the benefit of lesser risk that a manager gets by adding negatively or less correlates securities in the portfolio.
However, it is a fact that risk can only be minimized and cannot be eliminated completely. The risk that is specific to the business is called systematic risk and due to its unpredictability it cannot be diversified away.
Thus, from the above we can conclude that the correct option is A.