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Mice21 [21]
2 years ago
8

Entrepreneurs drive innovation in a free-market system by introducing ________.

Business
1 answer:
Shalnov [3]2 years ago
7 0
Answer: Competition

Explanation:
The entrepreneur takes the risk to introduce new competing technologies that can provide a product or service at lower price. This creates competition, and the customer benefits from being offered lower prices and improved products.

Furthermore, price gauging and monopoly are minimized because competing and improved products drive out inferior products as well as inferior service.

You might be interested in
An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 9% annual coupon. Bond L matures in 15 yea
aksik [14]

Answer:

Price of L bond at 5 percent required rate of return = $1,415.16

Price of L bond at 7 percent required rate of return = $1,182.16

Price of L bond at 10 percent required rate of return = $923.94

The price of the long term bonds change more with a change in interest rate because the long term bonds have a greater interest rate risk as compared to the short term bonds

Explanation:

L bond has a coupon rate of 9 percent, a face value of $1,000 and matures in 15 years. The coupon payments are made on annual basis. At the time of maturity the bondholder gets the face value.

We can find the present value of the coupon payments using the present value of annuity formula and the present value of the face value to be received after fifteen years using the present value formula. Sum of the present value of annuity of coupon payments and present value of the face value should equal the fair value (price) of the bond.

If the required rate of return is 5 percent, the price of the bond can be computed as under

Price = PMT [[(1+i)^n] -1]/[ix(1+i)^n] + FV/(1+i)^n

where PMT = 1,000 x 9% = $90

n = 15 years, i = 5% and FV = $1,000

Plugging the values in the formula we get

Price = 90[{(1+0.05)^15} - 1]/ [0.05 x (1+0.05)^15] + 1,000/(1+0.05)^15

Price = 90[{(1.05)^15} - 1]/ [0.05 x (1.05)^15] + 1,000/(1.05)^15

Price = 90[2.07893 - 1]/ [0.05 x 2.07893] + 1,000/2.07893

Price = 90[1.07893]/ [0.10395] + 1,000/2.07893

Price = 934.14 + 481.02 = 1,415.16

If the required rate of return increases to 7 percent, the price is computed as under

Price = 90[{(1+0.07)^15} - 1]/ [0.07 x (1+0.07)^15] + 1,000/(1+0.07)^15

Price = 90[{(1.07)^15} - 1]/ [0.07 x (1.07)^15] + 1,000/(1.07)^15

Price = 90[2.759 - 1]/ [0.07 x 2.759] + 1,000/2.759

Price = 90[1.759]/ [0.19313] + 1,000/2.759

Price = 819.71+ 362.45 = 1,182.16

If the required rate of return increases to 10 percent, the price is computed as under

Price = 90[{(1+0.1)^15} - 1]/ [0.1 x (1+0.1)^15] + 1,000/(1+0.1)^15

Price = 90[{(1.1)^15} - 1]/ [0.1 x (1.1)^15] + 1,000/(1.1)^15

Price = 90[4.1772 - 1]/ [0.1 x 4.1772] + 1,000/4.1772

Price = 90[3.1772]/ [0.41772] + 1,000/4.1772

Price = 684.55+ 239.39 = 923.94

The price of the long term bonds change more with a change in interest rate because the long term bonds have a greater interest rate risk as compared to the short term bonds

3 0
3 years ago
Which responsibility belongs to the marketing function
boyakko [2]

Answer:

Marketing deals with the existing and the potential market segments of a business essential and are responsible for the product, pricing, placing the product in the market and in the mildest of the consumer and promotion of the product.

Moreover, Markering is responsible for provide the upto date information of the consumers and to identify new trends and opportunities in the market as well.

Explanation:

4 0
3 years ago
If you have 1-year rate is 8%, 2-year rate is 9%, and 3-year rate is 10%. Assume that the pure expectations theory for the term
e-lub [12.9K]

Answer:

1 year rate 2 year from now = 12%  (Approx)

Explanation:

Given:

1-year rate = 8%

2-year rate = 9%

3-year rate = 10%

Computation:

According to Pure Expectations Hypothesis,

(1 + 3-year rate)³ = (1 + 2-year rate)² (1 + 1 year rate 2 year from now)

(1.10)³ = (1 + 1.09)²(1 + 1 year rate 2 year from now)

1.331 = 1.1881 (1 + 1 year rate 2 year from now)

(1 + 1 year rate 2 year from now)  = 1.12

1 year rate 2 year from now = 0.12

1 year rate 2 year from now = 12%  (Approx)

3 0
3 years ago
Since 2008, Ben has owned all 100 outstanding shares of N and M Corporation’s stock. Ben’s basis for the stock is $50,000. In 20
FromTheMoon [43]

Answer:

A. $75,000 dividend

Explanation:

This is not  a capital gain as it do not come from the change in the value of the previously owned shares this are new shares.

The shares which N and M provide in favor to Ben are an stock dividend thus, the tax treatment should be of dividends as well.

6 0
2 years ago
IM JUST GIVING AWAY POINTS!!!!!!
katrin2010 [14]

Answer:

I DONT NEED IT I DONT NEED IT I NEEEED ITTTTTTTT

5 0
3 years ago
Read 2 more answers
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