Answer:
d. encourages both U.S. and foreign residents to buy U.S. assets.
Explanation:
The interest rate in a country has influence on the capital of it.
When the real interest rates in the United States increase, the U.S. assets have higher value so that become attractive to funds. Thus, it encourages both foreign and U.S. residents to buy U.S. assets.
Besides, when the real interest rate in the U.S. increases, it encourages the U.S residents to save more U.S. assets and discourage them from purchasing foreign assets
=> The net capital inflow in U.S would increase
Answer:
The correct answer is False.
Explanation:
Commercial credit has its importance in that it is an intelligent use of short-term liabilities of the company to obtain resources in the least expensive way possible. For example, accounts payable constitute a form of commercial credit. They are the short-term credits that suppliers grant to the company. Among these specific types of accounts payable are the open account which allows the company to take possession of the merchandise and pay for them in a certain short term, the Commercial Acceptances, which are essentially checks payable to the supplier in the future, the Notes which is a formal recognition of the credit received, the Consignment in which no credit is granted and ownership of the goods never passes to the creditor to the company. Rather, the merchandise is sent to the company with the understanding that it will sell it for the benefit of the supplier, withdrawing only a small commission for the utility.
A long-term loan is usually a formal agreement to provide funds for more than one year and most are for some improvement that will benefit the company and increase profits. An example is the purchase of a new building that will increase capacity or machinery that will make the manufacturing process more efficient and less expensive. Long-term loans are usually paid from the profits. Mortgage: It is a conditional transfer of property that is granted by the borrower (debtor) to the lender (creditor) in order to guarantee the payment of the loan. Importance: It is important to note that a Mortgage is not an obligation to pay since the debtor is the one who grants the mortgage and the creditor is the one who receives it, in case the lender does not cancel said mortgage, it will be taken away and will be transferred to the borrower. It should be noted that the purpose of the mortgages by the lender is to obtain some fixed asset, while for the borrower it is to have security of payment through said mortgage as well as to obtain a profit from it through the interest generated. For the borrower it is profitable due to the possibility of obtaining a profit through the interest generated from said operation.
Answer:
C 21.55%
Explanation:
The investment grows by 5% in three months and assuming that the investment earns 5% for every three months (every quarter). Therefore every quarter investment earns 5%. The annualized return is calculated as follows:
Annualized return = (1 + periodic return) * (1 + periodic return).... -1 * 100
Annualized return =( 1.05 * 1.05 * 1.05 * 1.05) - 1 * 100
Annualized return = 21.55%
Answer:
Sixty days
Example:
That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than sixty days after the due date of the premium in default.planation:
Answer:
9.21%
Explanation:
Given: total assets = $250,000
Total capital = total assets = $250,000
Total debt to total capital ratio = 17.5%
Which means:
Total debt / Total capital = 17.5%
Find total debt:
Total debt = Total capital * 17.5%
= $250,000 * 0.175
= $43,750
Total debt = $43,750
Find total equity:
Total equity = Total capital - Total debt = $250,000 - $43,750 = $206,250
To find the Return on Equity (ROE), use the formula based on Du point:
ROE = Profit margin * Asset turnover * Equity multiplier
= (Net income / Sales ) * ( Sales / Total assets ) * ( Total assets / Total equity)
= 9.21%
ROE = 9.21%
