Answer:
In a large open economy, if political instability abroad lowers the net capital outflow function, then the real interest rate falls, while the real exchange rate rises and net exports fall. (D)
Explanation:
NX = EXPORTS – IMPORTS
If political instability abroad lowers the net capital outflow function that would mean that NX is reducing, which increasing imports and decreasing exports. This means that domestic goods are relatively more expensive due to a high exchange rate. In terms of the real interest rate, it falls because the demand for financial assets decreases.
Based on the coupon rate of Guggenheim Inc's bond as well as its yield to maturity, the market price is $1,768.55.
<h3>What is the market price of the bond?</h3>
First, find the coupon amount:
= 7.3% x 2,000
= $146
The market price is:
= ( 146 x (1 - (1 + 8.5%)⁻²¹) / 8.5%) + 2,000 / (1 + 8.5%)²¹
= 1,407.97 + 360.58
= $1,768.55
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Answer:
The price of the stock one year from today is $37.45
Explanation:
The expected dividend that is the dividend for the next period of D1 is given as 2.8. To calculate the value of the stock one year from now, we need to use D2 in our calculations.
The formula to find the price of a stock that has a constant dividend growth is,
P0 = D0 * (1+g) / r - g
This is to calculate the pricce of the stock today. To calculate the price of the stock one year from today, we need to use D2 in our calculations.
Where, D2 = D1 * (1+g)
Thus, the price of the stock one year from today or P1 is
P1 = 2.8 * (1+0.07) / 0.15 - 0.07 = $37.45
Answer:
b. $75.
Explanation:
The computation of the time charge per hour is shown below;
But before that the total charge is
Labour Charge = $800,000
Overhead Cost = $480,000
Target Profit = $220,000
Total Charge = $1,500,000
Now
time charge per year is
= $1,500,000 ÷ 20,000 direct labor hours
= $75 per year
Hence, the company's time charge per hour is $75 per year
Therefore the correct option is b.