Answer:
Market Principal notes that there should be no arbitration in the efficient market unless there is some arbitration so an efficient market system can quickly neutralize the situation.
The futures market for May, in the example above, is trading at $3.82 while the spot price is $3.45. The spot price month is listed but carriage costs and transportation are given as $0.20 and $0.03 per month.
This gives us a total price of $3.68 and this means the futures market is priced at a premium of $0.14.
3.82-= 0.14 (3.45 + 0.20 + 0.03)
This is not normal, of course, and traders will start shortening futures prices when going on the spot contracts for long. This would drive down the price of the futures while increasing the spot price, which should stabilize at $3.75.
Nevertheless, it is necessary to remember that in such equation there is also a borrowing fee which must also be taken into account. If the interest rate is 6 percent a year so it also takes into account a monthly finance fee of 0.5 percent of the contract value.
Answer:
<em>Rational Ignorance
</em>
Explanation:
Understanding everything is unlikely. A level of ignorance is unavoidable, and we all have to determine for ourselves what is worth learning and recognizing.
Rational ignorance lets each one of us determine the most valuable information.
Rational ignorance means picking to remain ill informed on a subject deliberately because the cost of obtaining the data is greater than the expected possible advantages.
Answer:
The correct answer is C. M1 plus near monies.
Explanation:
The liquidity approach emphasizes the role of money as a store of value and downplays the role it plays as a means of payment. To assess the amount of money emphasizes that the essentially distinctive property of money is that it is the most liquid of assets.
The strict money supply or circulating medium (M1), which defines money as the money in the hands of the public and demand deposits (DV) is the usual most accepted formula as money. Therefore, money in the strict sense is listed as such in the monetary statistics of the International Monetary Fund (IMF) and many other financial institutions around the world.
Explanation:
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Answer:
Stockholders' equity at the end of the year was $110,000.
Explanation:
Beginning Balance of Stockholder's Equity = $40,000
Net Income for the year = $90,000
Dividend declared in the year = $20,000
Ending Balance of Stockholder's Equity = Beginning Balance of Stockholder's Equity + Net Income for the year -Dividend declared in the year
Ending Balance of Stockholder's Equity = $40,000 + $90,000 - $20,000
Ending Balance of Stockholder's Equity = $110,000
