When the money market is drawn with the value of money on the vertical axis, an increase in the money supply shifts the money supply curve to the
right, raising the price level.
What does money market mean?
The money market refers to trading in very short-term debt investments. At the wholesale level, it involves large-volume trades between institutions and traders. At the retail level, it includes money market mutual funds bought by individual investors and money market accounts opened by bank customers.
What is the features of money market?
It is market purely for short-term funds or financial assets called near money. It deals with financial assets having a maturity period up to one year only. It deals with only those assets which can be converted into cash readily without loss and with minimum transaction cost
What Is Price Level?
Price level is the average of current prices across the entire spectrum of goods and services produced in an economy. In more general terms, price level refers to the price or cost of a good, service, or security in the economy.
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Answer:
g = 16%
dividends yield:
Year 1 4.60%
Year 3: 4.78%
<u>expected rate of return: </u>
year 1 20.6%
year 3 20.78%
<u></u>
Explanation:
<u>grow rate:</u>
D1 /D0 = g
1.16/1.00 - 1 = 0.16
1.3456/1.16 - 1 = 0.16
the grow rate is 16%
<u>dividend yield:</u>
dividends/stock price = dividend yield
1/21.7 = 0,0460 = 4.60%
1.3456/28.15 = 0,04780 = 4.78%
<u>expected rate of return: </u>
dividend yield + grow rate
4.60% + 16% = 20.6%
4.78% + 16% = 20.78%
Answer:
$38,771.44
To achieve at least the 8% rate Walt can pay until this amount.
Explanation:
The goal would be to calcualte the present value for each cashflow using the expected rate of 8%
![\left[\begin{array}{ccc}-&Cash Flow&Discounted\\Year \: 1&12,500&11,574.0740740741\\Year \: 2&10,000&8,573.38820301783\\Year \: 3&7,500&5,953.74180765127\\Year \: 4&5,000&3,675.14926398227\\Year \: 5&2,500&1,701.45799258438\\Year \: 6&0&0\\Year \: 7&12,500&7,293.62994077667\\Total&50,000&38,771.4412820865\\\end{array}\right]](https://tex.z-dn.net/?f=%5Cleft%5B%5Cbegin%7Barray%7D%7Bccc%7D-%26Cash%20Flow%26Discounted%5C%5CYear%20%5C%3A%201%2612%2C500%2611%2C574.0740740741%5C%5CYear%20%5C%3A%202%2610%2C000%268%2C573.38820301783%5C%5CYear%20%5C%3A%203%267%2C500%265%2C953.74180765127%5C%5CYear%20%5C%3A%204%265%2C000%263%2C675.14926398227%5C%5CYear%20%5C%3A%205%262%2C500%261%2C701.45799258438%5C%5CYear%20%5C%3A%206%260%260%5C%5CYear%20%5C%3A%207%2612%2C500%267%2C293.62994077667%5C%5CTotal%2650%2C000%2638%2C771.4412820865%5C%5C%5Cend%7Barray%7D%5Cright%5D)
<em><u>For example year 3</u></em>
Then we add each cashflow, to get the present value of the project.
To achieve at least the 8% rate Walt can pay until this amount.
Answer:
investment
Explanation:
An investment is a commodity or object purchased for the purpose of producing revenue or development. In a financial sense, an investment is really the buying of products which are not used now but used for wealth creation in the forward.
In finance, investment is a capital commodity acquired with the expectation that the commodity provides income in retirement or is being sold for profit at a better price later. In other terms, Investment is really the concept of putting capital to work to create or grow a company or plan or to acquire an estate, with the purpose of generating income or capital growth.
