Answer: B. The firm would install the filter at a cost of $ 300,000.
Explanation:
If the community owns the property rights, they would be able to demand that the firm pay the external cost of $500,000 per year.
If on the other hand the company installed a filter, it would cost them $300,000 but then they would not have to pay the community the $500,000.
The lower cost option would be to install the filter for $300,000 which is what the firm would do.
Answer:
c. 32.99%
Explanation:
Risk yield = bond yield*(1 - Federal tax rate)
6.50% = 9.70%*(1 - Federal tax rate)
1 - Federal tax rate = 6.50%/9.70%
Federal tax rate = 1 - 6.50%/9.70%
= 32.99%
Therefore, The federal tax rate that you are indifferent between the two bonds is 32.99%
For real estate income property, mortgage loans are often made on a non-recourse basis. This means that the risk of default must be included in the mortgage interest rate.
<h3>What is a mortgage loan?</h3>
A mortgage is a form of loan used to purchase or maintain a home, land, or another type of real estate. The borrower agrees to repay the lender over time, often through a series of monthly payments divided into principal and interest. The property is subsequently put up as collateral for the loan.
Borrowers must apply for a mortgage through their preferred lender and meet specific criteria, such as credit score requirements and down payments. Mortgage applications are rigorously scrutinized before they reach the closing stage. Mortgage types vary according to the borrower's needs, such as conventional and fixed-rate loans.
To learn more about a mortgage loan, click
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Answer:
E. The FOMC instructs the NY trading desk to sell government bonds on the open market.
Explanation:
FOMC The Federal Open Market Committee is charged under US Laws.
This is controlled through transactions of FOMC,
When Federal Committee (FOMC) purchases bonds from open markets then there is an instant increase in level of reserves in the banking system.
Thereafter, the sale by Federal Committee in the open market tend to decrease the level of reserves in the banking system.
This is directly related to the reserve level.