Answer:
$54,000
Explanation:
The opportunity cost is that cost which can be given the benefit out of the given options. In another way, it would be select the best alternative option which gives you the best results or benefits.
In the given case, Allison earns $54,000 in her first year of employment and if she works with her father she earns an annual salary of $38,000. So, the opportunity cost, in this case, would be $54,000
Answer:
interest rate parity
(0.8/1) * (1.4*3/12)/(1.25*3/12) = 0.8
Hence It is proved that interest rate parity does not hold because the vale of forward contract is $0.79/CD.
Answer:
Increasing inflation expectations will change the demand curve to the left and the supply curve to the right, resulting in a fall in the price of the equilibrium. therefore new equilibrium occurs at a reduced price
Since Nominal rate of interest = Real interest rate + Inflation rate.
As a result, the rise in expected inflation will boost the nominal rate of interest on both quick-term and lengthy-term bonds.
The longer the bond maturity, the greater the volatility in price. The longer the maturity of the bond, the larger / bigger the price change as a result of market interest rate changes. As a result, long-term capital losses will be more than short-term capital losses.
The correct matching of the given scenarios are"
- Klaus' demand for orange juice- Relatively elastic
- Amanda's annual demand for coffee- Relatively elastic
- Jackson's demand for mystery novels- Relatively inelastic
- Hermy's demand for Minute Maid orange juice- Relatively inelastic
- Olivia's daily demand for Starbucks latte- Relatively inelastic
- Stephen spends a very little part of his income on soda- Relatively elastic
- Xavier's demand for his economics textbook- Relatively inelastic
<h3>What is Elasticity of Demand?</h3>
This refers to the substantial change in demand of a particular product as a result of an economic factor.
With this in mind, we can see that inelastic demand has to do with the situation where the demand does not change regardless of the price change.
Read more about elasticity of demand here:
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