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3 years ago

Which of the following would most likely suffer the least from the costs of inflation?

Business

1 answer:

Arturiano [62]3 years ago

8 0

Answer:

B. Persons on fixed incomes.

Explanation:

Inflation is a general increase in prices and fall in the purchasing value of money, therefore, a person with a fixed income will not be affected.

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On May 15, 2000 you enter into a 1-year forward rate agreement (FRA) with a bank for the period starting November 15, 2000 to Ma

Artyom0805 [142]

Answer:

3.51%

Explanation:

First, we need to calculate the YTM of 6 months zero-coupon bond by using the following formula

Price = Face value / ( 1 + YTM )^numbers of years

96.79 = 100 / ( 1 + YTM )^1

1 + YTM = 100 / 96.79

1 + YTM = 1.0331646

Now calculate the YTM of 1 Year zero-coupon bond

93.51 = 100 / ( 1 + YTM )^1

YTM = 1.0331646 - 1

YTM = 0.0331646

YTM = 3.31646%

YTM = 3.316%

1 + YTM = 100 / 93.51

1 + YTM = 1.06940

YTM = 1.06940 - 1

YTM = 0.06940

YTM = 6.940%

YTM = 6.94%

Hence the forward rate is calculated as follow

Forward rate = [ (1 + YTM of 1 year zero coupon bond ) / ( 1 + YTM of 6 months year zero coupon bond ) ] - 1 = ( 1 + 6.94% ) / ( 1 + 3.316% ) = [ 1.0694 / 1.03316 ] - 1 = 1.03508 - 1 = 0.03508 = 3.508% = 3.51%

At the time of inception the formward rate is 0.

7 0

3 years ago

Which ones the right answer? ignore where i selected

expeople1 [14]

Answer:B

Explanation:

6 0

3 years ago

Read 2 more answers

King Auto Supply sells car and truck parts, as well as tire replacement and balancing services. As King places its order for tru

Y_Kistochka [10]

Answer:

joint

Explanation:

Based on the information provided within the question it can be said that such business products are characterized as having joint demand. This type of demand refers to when two or more goods or services are usually bought or demanded together by customers, since they complement each other. Such as cars and petrol, or in this case cars and tires.

5 0

3 years ago

A certificate of deposit often charges a penalty for withdrawing funds before the maturity date. If the penalty involves two mon

jeka57 [31]

Answer:

The penalty will be worth $200.

Explanation:

The certificate of deposit is worth $20,000.

The interest rate on it is 6%.

The penalty on early withdrawal is 2 months of interest.

The annual interest

$= Annual\ interest\ rate\ \times\ Investment$

$= 0.06\ \times\ $20,000$

$= \$ 1,200$

The penalty will be

$= 2\ months\ of\ interest$

$= \frac{2}{12}\ \times Annual\ interest$

$=\frac{2}{12}\ \times\ \$ 1,200$

$= \$ 200$

7 0

3 years ago

Assume that you are saving up for a trip around the world when you graduate in two years. If you can earn 6% on your investments

AURORKA [14]

Answer:

$12,015 approx.

Explanation:

To calculate present value of a future amount, the future amount is discounted at the rate of interest for the period of investment, which reveals present value as on today. The technique is referred to as discounting technique.

Suppose P denote the amount invested today, which when matured after period of two years yields $13500. Following formula is used for calculating the money invested:

$A =\ P (1\ +\ \frac{R}{100}) ^{n}$

wherein, A = Amount

P = Principal

R = Rate of interest

n = number of years

$13500 =\ P (1\ +\ \frac{6}{100}) ^{2}$

13,500 = 1.1236 P

⇒ P = 12,015 Approx.

Thus, $12015 is required to be deposited today so as to yield $13,500 after 2 years compounded at 6% per annum rate of interest.

5 0

3 years ago

Read 2 more answers

Which of the following would most likely suffer the least from the costs of​ inflation?

Which of the following would most likely suffer the least from the costs of inflation?