Answer:
1. The Fed is an independent government agency ⇒ C. A government agency should not have so much control over the economy because politicians are always going to do anything to win the next election.
The Fed is an independent government agency that pursues the best economic policy for the nation independent of what politicians want.
2. The Fed is overseen by the federal government ⇒ A. The Federal Reserve lacks accountability because no one audits the Fed. There is no way to know what really goes on behind the scenes.
The Federal government however, gets to oversee the Fed to ensure accountability and best practices.
3. The Fed conducts monetary policy through open market operations ⇒ B. The Federal Reserve just prints more money when the economy needs it and gives it to link.
The Fed does not only oversee the printing of money by the Treasury, they also conduct monetary policy through the use of OMO by buying securities when they want money supply to increase and selling when they want a decrease.
Answer and Explanation:
Municipal bond rate = Taxed bond rate × (1-Tax rate)
4.25 = Taxed bond rate × ( 1 - 0.35)
Taxed bond rate = 6.54
Answer:
$53
Explanation:
The computation of the stock sale at the end of the year is computed after calculating the required rate of return and the growth rate
The required rate of return by applying the Capital Asset Pricing model formula is
= Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 6% + 1.2 × (16% - 6%)
= 6% + 12%
= 18%
Now the growth rate is
Stock price = Dividend per share÷ (Required rate of return - growth rate)
$50 = $6 ÷ (18% - growth rate)
So, the growth rate is 6%
Now the ending stock price is
Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend is
= $6 + $6 × 6%
= $6 + 0.36
= $6.36
So,
= ($6.36) ÷ (18% - 6%)
= $53
The attitude toward each other.
