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3 years ago

A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.\

1 answer:

7 0

<span>A market refers to people with unsatisfied wants and needs who are willing and able to buy a product or service. The market is made up of people who want and need to purchase a product or service, those in the 'market' for a item will search out the best quality, best price, and best way to achieve the product or service they need. The market is a big place that holds many different options for consumers to find exactly what they are looking for.</span>

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Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $50,000 or $150,000, with equal

Ann [662]

Answer:

Kindly check explanation

Explanation:

Given the following :

Risk free return (risk less investment) = 5%

Cashflow derived from portfolio = $50,000 or $150,000 each at a probability of 0.5

(a) If you require a risk premium of 10%, how much will you be willing to pay for the portfolio?

Risk premium = 10%

Required return on portfolio = risk premium + risk free return = (10% + 5%) = 15%

Expected value of cashflow:

(0.5 × $50,000) + (0.5 × $150,000)

$25,000 + $75,000 = $100,000

Value of portfolio = Amount paid(a) × (1 + required return)

100,000 = a( 1 + 0.15)

100,000 = 1.15a

a = (100,000 / 1.15)

a = 86956.521

a = $86,956.5

B) If amount paid for portfolio = $86,956.5

Expected rate of return :

(Expected value - amount paid) / amount paid

= ($100,000 - $86,956.5) / $100,000

= $13043.5 / $100,000

= 0.130435 = 13.04%

C.) Now suppose you require a risk premium of 15%. What is the price you will be willing to pay now?

Risk premium = 15%

Required return on portfolio = risk premium + risk free return = (15% + 5%) = 20%

Value of portfolio = Amount paid(a) × (1 + required return)

100,000 = a( 1 + 0.20)

100,000 = 1.20a

a = (100,000 / 1.20)

a = 83333.333

a = $83,333.3

D.)

At a required risk premium of 10%, portfolio will sell at $86,956.5

At a required risk premium of 15%, portfolio will sell at $83,333.3

Hence, the price at which a portfolio will sell decreases as risk premium increases.

7 0

3 years ago

GDP is defined as the a. value of all goods and services produced within a country in a given period of time. b. value of all go

Anon25 [30]

Answer:

c. value of all final goods and services produced within a country in a given period of time.

Explanation:

GDP is the value of all final goods and services produced within a country in a given period of time.

GDP = Consumption + Investment + Government Spending + Net Exports

GNP is the value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.

5 0

3 years ago

A 27-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 6.00% (3.000% of face value every six months). The rep

nikdorinn [45]

Answer:

(A) $1,055.35 (B) $2,180.53 (C) $780.07 (D) $412.08.

Explanation:

The tenor of the bond is 27 years i.e. (27 * 2=) 54 periods of 6 months each (n).

Face Value (F) = $1,000

Coupon (C) = 6% annually = 3% semi annually = (3% * 1000 face value) = $30.

The Present Value (PV) of the Bond is computed as follows.

PV of recurring coupon payments + PV of face value at maturity

= $\frac{C(1-(1+r)^{-n}) }{r} + \frac{F}{(1+r)^{n}}$

A) Yield = 5.6% annually = 2.8% semi annually.

$PV = \frac{30(1-(1.028)^{-54}) }{0.028} + \frac{1,000}{(1.028)^{54}}$

= 830.25 + 225.10

= $1,055.35.

B) Yield = 1% annually = 0.5% semi annually.

$PV = \frac{30(1-(1.005)^{-54}) }{0.005} + \frac{1,000}{(1.005)^{54}}$

= 1,416.64 + 763.89

= $2,180.53.

C) Yield = 8% annually = 4% semi annually.

$PV = \frac{30(1-(1.04)^{-54}) }{0.04} + \frac{1,000}{(1.04)^{54}}$

= 659.79 + 120.28

= $780.07.

D) Yield = 15% annually = 7.5% semi annually.

$PV = \frac{30(1-(1.075)^{-54}) }{0.075} + \frac{1,000}{(1.075)^{54}}$

= 391.95 + 20.13

= $412.08.

4 0

3 years ago

George is offered an investment opportunity by his friend Ray. He asks George for $6,900 and offers to repay him $12,990 after a

SVETLANKA909090 [29]

Answer:

Depositing in bank is a better option.

Explanation:

For this solution, we can either determine the interest rate given to George by his one of the friend or the future worth method,

Future worth method is used here,

Given that,

PV = $6,900

R = 9%

N = 10 Years

$FV = PV\times(1+R)^{N}$

$FV = 6,900\times(1+0.09)^{10}$

$FV = 6,900\times(1.09)^{10}$

FV = 6,900 × 2.3673

FV = $16,334.81

Since, the future worth of investing in bank is more than the money to be offered by the George's friend (16,334.81 > 12,900) and hence, depositing in bank is a better option.

8 0

3 years ago

Angela is a project manager who leads a curriculum project. She is creating an outline of what each team member needs to complet

USPshnik [31]

Answer:

Planning

Explanation:

Project planning refers to all you do to set up a successful project. It's the process you're going through to set the steps needed to define your project goals, clarify the scope of what needs to be done and develop the task list to do that.

6 0

3 years ago

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