It is true that the Law of demand is defined as the relationship between price and quantity from a buyer's perspective
<h3>What is law of demand?</h3>
The law of demand states that that as the price of a good increase, the quantity demanded will fall and as the price of a good falls, the quantity demanded also rise.
Here, consumers tend to buy more goods and services as the price go down or fall, hence more of a product will be purchased at lower prices than at higher prices.
Therefore, the Law of demand is defined as the relationship between price and quantity from a buyer's perspective
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Answer:
A. 3403.75 dollars
B. 3150
C. 0.579
D. Is an attachment
Explanation:
A. We first find the premium cost
= 0.05x5000 x 1+0.06/4
= 250x1.015
= 253.75
From here we find expected dollar cost
= Exchange rate x units + premium
= 0.63x5000+253.75
= 3,403.75 dollars
B. Forward rate = 0.63
Total cost of dollar
= 0.63x5000
= 3150
C. The investor would be indifferent at 0.579
Forward rate = unit * future + premium
3150 = 5000 * future + 253.75
3150-253.75 = 5000*future
We solve and divide through by 5000
Future = 0.579
D is in the attachment
Meg invested $16,000 in a savings account. if the annual interest rate is 6%. In 5 years for quarterly compounding is $ 21,549.68.
<h3>What is interest rate?</h3>
- The amount of interest due each period expressed as a percentage of the amount lent, deposited, or borrowed is known as an interest rate (called the principal sum).
- The total interest on a loaned or borrowed sum is determined by the principal amount, the interest rate, the frequency of compounding, and the period of time the loan, deposit, or borrowing took place.
- The interest rate over a year is known as the annual interest rate.
- Other interest rates are applicable over shorter time frames, such a day or a month, but they are typically annualized.
<h3>What is saving account?</h3>
- An account in a retail bank is a savings account.
- Common characteristics include having a finite number of withdrawals allowed, not having check or connected debit card facilities, having few transfer choices, and not being able to become overdrawn.
- Savings account transactions were typically recorded in a passbook in the past, hence the term "passbook savings accounts," and bank statements were not typically supplied.
- Nowadays, same transactions are typically recorded electronically and are available online.
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Answer:
Ans 1)
As Average Annual return increases from Combination A to E we can observe that Standard deviation also increases from A to E
Therefore it is clear that there is positive relationship between the Risk of Caroline's portfolio and the average annual return.
Ans 2)
IF Caroline needs to reduce the risk associated with portfolio combination D from 15 to 5 then he can do 2 things such that he should sell some portion of portfolio invested into stocks and ultimately accept lower returns because as we see in Part 1) answer risk and returns are positively correlated.
Option 2) and Option 3) are correct
Ans 3)
95% confidence interval gives us range of -2*SD, 2*SD
therefore range of return for given scenario with portfolio return equals to 3.5% and SD=5%
(Mean- z value*SD , Mean value*SD)=
(3.5%-2*5% , 3.5%+2*5%)=(-6.5%,13.5%)
Gain of 13.5% and Loss of -6.5%