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Andreyy89
3 years ago
12

Different compounding periods, are used for different types of investments. In order to properly compare investments or loans wi

th different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The__________ interest rate is quoted by borrowers and lenders, and it is also called the annual percentage rate (APR). If the compounding periods for different securities is the same, then you____________ use the APR for comparison. If the securities have different compounding periods, then the____________ must be used for comparison. Here, M is the number of compounding periods per year and INOM/M is equal to the periodic rate (IPER). If a loan or investment uses___________ compounding, then the nominal interest rate is also its effective annual rate. However, if compounding occurs more than once a year, EAR is___________ INOM. Quantitative Problem: Bank 1 lends funds at a nominal rate of 6% with payments to be made semiannually. Bank 2 requires payments to be made quarterly. If Bank 2 would like to charge the same effective annual rate as Bank 1, what nominal interest rate will they charge their customers? Round your answer to three decimal places. Do not round intermediate calculations.__________ %
Business
1 answer:
KengaRu [80]3 years ago
4 0

Answer:

Explanation:

The <u>nominal</u> interest rate is quoted by borrowers and lenders-------------

then you <u>can</u> use the APR------------

different compounding periods, then the effective annual rate must------

If a loan or investment uses <u>annual</u> compounding, then the nominal--------

However, if compounding occurs more than once a year, EAR is the effective INOM

Quantitative problem:

Effective annual rate of Bank 2 (assuming its APR is 6%) = (1.015)^4 – 1 = 0.061364

To get the same EAR, Bank 1 should charge per half year 1.061364^(1/2) – 1 = 0.030225

The nominal interest rate (APR)= 0.030225*2 = 0.06045 = 6.05%

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A strategy of spreading investments among different industry sectors is
Archy [21]

Answer:

diversification

Explanation:

because it is a technique that reduce risk by allocating investments across various industries

3 0
2 years ago
Smythe Co. makes furniture. The following data are taken from its production plans for the year.
PtichkaEL [24]

Answer:The hazardous waste disposal cost per unit  for chair and table respectively is $2.83 and $1.54

Explanation:

From the question, If cost are assigned at a rate based on direct labor hours, then the  total disposal cost for chairs is

total disposal cost for chairs =Direct labor hours required for chairs/Total Direct labor hours required for both furniture x Hazardous waste disposal costs

268,000/ 268,000+16,400  x 615,000

= 268,000/ 284,400  x  615,000

===$595,535.865

and for tables for  is

total disposal cost for tables=Direct labor hours required for tables /Total Direct labor hours required for both furniture x Hazardous waste disposal costs

16,400 / 268,000+16,400  x  615,000

= 16,400 / 284,400  x 615,000

===$35,464.135

The hazardous waste disposal cost per unit  for chair and table respectively is

For chair ====total disposal cost for chairs/ Expected production of chairs

$595,535.865/210,000 units= $2.83

For table ====total disposal cost for table/ Expected production oftable

$35,464.135/23,000 units=$1.54

4 0
2 years ago
John wants his assessment reduced by 30% since his property is located next to a power plant. The SCAR hearing officer granted J
Ray Of Light [21]

Answer:

John must first complete a process that starts with Form RP-524. Since the problem states that he already had a SCAR hearing, the only option left is the Tax Certiorari Proceeding which is a legal lawsuit filed in the New York State Supreme Court.

Explanation:

The compete process is as follows:

John must first file a grievance form, if he lives outside of New York City and Nassau County, he can use Form RP-524 "Complaint on Real Property  Assessment" and file it with the assessor or the board of assessment review (BAR) in John's city. New York City residents and Nassau Country residents must contact directly their tax or review commissions by telephone. The grievance forms must be filed before Grievance Day in John's city (it varies depending on the city).

Then John will have to appear before the BAR and present his claim. The BAR is made up of 5 members and it cannot include the assessor or any member from the assessor's office.

If the BAR's decision doesn't satisfy John, then he can proceed with a Small Claims Assessment Review (SCAR). Since John was granted only a 20% reduction by the SCAR hearing officer, the only option left is the Tax Certiorari Proceeding which is a legal lawsuit filed in the New York State Supreme Court.

5 0
3 years ago
Because common shareholders are entitled to the profits that remain after all of a corporation's other obligations have been met
Studentka2010 [4]

Because common shareholders are entitled to the profits that remain after all of a corporation's other obligations have been met, common shareholders are known as Residual owners.

<h3>What does Shareholders means?</h3>

A shareholder (in the US frequently alluded to as investor) of a company is an individual or legitimate substance.

A body politic, a trust or organization) that is enlisted by the partnership as the lawful proprietor of portions of the offer capital of a public or confidential partnership. The impact of a shareholder on the not entirely set in stone by the shareholding rate claimed. Shareholders of a company are legitimately isolated from the actual enterprise.

They are for the most part not at risk for the organization's obligations, and the shareholders' responsibility for organization obligations is supposed to be restricted to the neglected offer cost except if a shareholder has offered ensures. The company isn't expected to record the helpful responsibility for shareholding, just the proprietor as recorded on the register.

Therefore Shareholders might have procured their portions in the essential market by buying into the Initial public offerings.

Learn more about Shareholder here:

brainly.com/question/19054394

#SPJ4

8 0
2 years ago
The underlying reason why trade benefits both sides of a trading arrangement is rooted in the concept of __________________.
Marysya12 [62]

Answer:

opportunity cost

Explanation:

The concept of Opportunity cost deals with the idea that individuals, investors, or business owners, due to scarcity of resources, lost possible benefits that could be gained, as he or she chooses alternative choice.

Hence, the underlying reason or factor trade benefits both sides of a trading arrangement is rooted in the concept of OPPORTUNITY COST.

Therefore, the right answer is Opportunity cost.

7 0
2 years ago
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