_____ power is a function of the amount of knowledge one possesses relative to the rest of the members of a group

An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 4%, on A bo

Sophie [7]

Answer:

let A = AAA bonds that yield 4%

let a = A bonds that yield 5%

let B = B bonds that yield 8%

A = 2B

A)

A + a + B = 28,000 (replace A with 2B)

0.04A + 0.05a + 0.08B = 1,460 (replace A with 2B)

2B + a + B = a + 3B = 28,000 ⇒ a = 28,000 - 3B

0.08B + 0.05a + 0.08B = 0.05a + 0.16B = 1,460 (replace a with 28,000 - 3B)

0.05(28,000 - 3B) + 0.16B = 1,400 - 0.15B + 0.16B =1,460

1,400 + 0.01B = 1,460

0.01B = 1,460 - 1,400 = 60

B = 60 / 0.01 = $6,000

A = $12,000

a = $28,000 - $6,000 - $12,000 = $10,000

AAA bonds = $12,000

A bonds = $10,000

B bonds = $6,000

B)

A + a + B = 38,000 (replace A with 2B)

0.04A + 0.05a + 0.08B = 1,990 (replace A with 2B)

2B + a + B = a + 3B = 38,000 ⇒ a = 38,000 - 3B

0.08B + 0.05a + 0.08B = 0.05a + 0.16B = 1,990 (replace a with 28,000 - 3B)

0.05(38,000 - 3B) + 0.16B = 1,900 - 0.15B + 0.16B =1,990

1,900 + 0.01B = 1,990

0.01B = 1,990 - 1,900 = 90

B = 90 / 0.01 = $9,000

A = $18,000

a = $38,000 - $9,000 - $18,000 = $11,000

AAA bonds = $18,000

A bonds = $11,000

B bonds = $9,000

3 0

2 years ago

In each scenario below, please label which mistake they made in regard to economic decision making. Alexander is heavily investe

krek1111 [17]

Answer:

a) Loss Aversion

b) Mental Accounting

c) Status Quo Bias

d) Misperceiving opportunity cost

e) Overconfidence

Explanation:

a) In Alexander's case, he is suffering from the Loss Aversion theory that is very prevalent in Economics where some people prefer not losing money as opposed to actually gaining money. Alexander does not want to lose the money he invested and so is holding on hoping to get back his money so he doesn't lose anything.

b) In Jim's case, he practices mental accounting. This is a situation where people group their various money related transactions in different groups in their mind and ascribe them different values. Jim did not attach enough value to the money he found though and so just decided to spend it.

c) Geneva faces Status quo bias which is a situation where one prefers things the way they are. She freezes every time big question is asked of her and just let's things continue the way they are every time. She faces the Status Quo Bias.

d) Tiffany misperceived her Opportunity Cost when she failed to calculate the transport cost associated with the job she took. Had she not done so, she would have factored in the correct Opportunity Cost and seen that it might be better to take the job closer to her.

e) Steve is overconfident in his ability to start a diet. He has been failing at doing so and yet believes he can do so. It is important therefore that he finds something else to spur him ti start the diet because his confidence in doing it himself is clearly a farce and does not match what he actually can do.

6 0

2 years ago

Jasmine Smith owns a condo worth $240,000, a car valued at $25,000, and miscellaneous assets worth $7,500. She owes $185,000 on

Amanda [17]

Answer:

The net worth is $100,000

Explanation:

The computation of net worth is shown below:

Net worth = Total assets - total liabilities

where,

Total assets = Condo + car + miscellaneous assets + mutual funds

= $240,000 + $25,000 + $7,500 + $27,500

= $300,000

And, the total liabilities equal to

= Owning a condo + car owned

= $185,000 + $15,000

= $200,000

Now put these values to the above formula

So, the answer would be equal to

= $300,000 - $200,000

= $100,000

The term life insurance policy is neither an asset nor a liability, so it would be not be considered in the computation part.

7 0

3 years ago

Daniela is a 25% partner in the JRD Partnership. On January 1, JRD makes a proportionate, liquidating distribution of $16,000 ca

zavuch27 [327]

Answer: The amount and character of Daniela's gain or loss from the distribution will be $0.

Explanation:

Given : Daniela is a 25% partner in the JRD Partnership, liquidating distribution of $16,000 cash, inventory with a $16,000 fair value (inside basis $8,000), and accounts receivable with a fair value of $8,000.

Here, Daniela will not recognize any gain or loss on the distribution. She will instead reduce the basis of the inventory she receives in complete liquidation of her interest.

4 0

3 years ago

A firm's immediate marketing environment differs from its macroenvironment is that the macroenvironment _____

chubhunter [2.5K]

Answer:

The macro environment represent the different external stakeholders who may be indirectly connected to the company

Explanation:A company macro environment represent the bigger picture within which the company is situated .this may include activities in other industries, government regulations and policies foreign markets,etc

5 0

3 years ago