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Ivanshal [37]
3 years ago
14

Which of the following statements is CORRECT, other things held constant? Select one: a. If companies have fewer good investment

opportunities, interest rates are likely to increase. b. If individuals increase their savings rate, interest rates are likely to increase. c. If expected inflation increases, interest rates are likely to increase. d. Interest rates on all debt securities tend to rise during recessions because recessions increase the possibility of bankruptcy, hence the riskiness of all debt securities. e. Interest rates on long-term bonds are more volatile than rates on short-term debt securities like T-bills.
Business
1 answer:
jolli1 [7]3 years ago
3 0

Answer: e. Interest rates on long-term bonds are more volatile than rates on short-term debt securities like T-bills.

Explanation:

Long term bonds are considered to be more sensitive to interest rates as opposed to short term securities. If interest rates were to rise, the bond could lose value.

They are also more sensitive to inflation. If inflation rates rise, the value of payment reduces. It is for this reason that longer term bonds have maturity risk premiums added to them to cater for the amount of time the bond has till maturity.

If you need any clarification do react or comment.

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Functions of Money Jeffrey has had a busy day. Today he went to a financial manager to begin planning for his son's future. He o
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Answer:

Store of value.

Explanation:

In economics or financial accounting, money can be defined as any asset used by an individual or business entity to make purchases of goods and services at a specific period of time.

Simply stated, money refers to any asset which can be used to purchase goods and services by customers.

This ultimately implies that, money is any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.

The three (3) main functions of money all over the world are;

I. Medium of exchange.

II. Unit of account.

III. Store of value.

In this scenario, Jeffrey went to a financial manager to begin planning for his son's future by opening a college savings account. Thus, this is is an example of a store of value because the purchasing power was transferred from the present to the future.

In conclusion, money being a store of value makes it possible to transfer purchasing power between traders and buyers from the present to the future.

5 0
3 years ago
The Nearside Co. just paid a dividend of $1.20 per share on its stock. The dividends are expected to grow at a constant rate of
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Answer and Explanation:

The computation is shown below:

a. Current price is

= D1 ÷ (Required return - Growth rate)

= ($1.20 × 1.04 ÷ (0.1 - 0.04)

= $20.8

b. Now the price in three year is

P3 = Current price × (1 + Growth Rate)^3

= $20.8 × (1.04)^3

= $23.40

c. For price in 10 year it is

P10 = Current price × (1 + Growth Rate)^10

= $20.80 × (1.04)^10

= $30.79

We simply applied the above formula

6 0
3 years ago
What do u mean by equipment ?​
miss Akunina [59]

Explanation:

1a : the set of articles or physical resources serving to equip a person or thing: such as. (1) : the implements used in an operation or activity : apparatus sports equipment. (2) : all the fixed assets other than land and buildings of a business enterprise. (3) : the rolling stock of a railway.

6 0
3 years ago
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See Hint If your income increases by 8%, and your quantity demanded of vanilla ice cream decreases by 18%, then vanilla ice crea
xz_007 [3.2K]

Answer:

The correct answer is B

Explanation:

Inferior goods are those goods or kind of goods whose demand declines or decrease when the income of the person or customer increases or rises. In other words, it means that the inferior goods demand is inversely associate to the customer or consumer income.

So, in this case, the income rises by 8% and the quantity demanded for the ice cream declines or falls by 18%, then the vanilla ice cream would considered as the inferior good.

3 0
3 years ago
Flipco signed a 15​-year note payable on January​ 1, 2018​, of $900,000. The note requires annual principal payments each Decemb
MrMuchimi

Answer:A debit to interest expense for $36,000

Explanation:

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3 years ago
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